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Young v. General Services Administration

June 1, 2000

DONALD YOUNG, ET AL., PLAINTIFFS,
V.
GENERAL SERVICES ADMINISTRATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Emmet G. Sullivan, United States District Judge.

MEMORANDUM OPINION

INTRODUCTION

Plaintiffs Donald and Diane Young, James Burke, and Charles E. Smith Realty L.P. ("Smith Realty") [hereinafter "plaintiffs"] commenced this lawsuit to enjoin defendants General Services Administration ("GSA") and United States Patent and Trademark Office ("PTO") [hereinafter "the government"] from awarding a contract to defendant-intervenor LCOR Alexandria L.L.C. [hereinafter "LCOR"] to develop the government's proposed project to consolidate PTO facilities in Alexandria, Virginia. Plaintiffs claim that the government has failed to comply with the National Environmental Policy Act ("NEPA") in its preparation of an Environmental Impact Statement ("EIS") by refusing to consider plaintiff Smith Realty's Alternative Scenario for the consolidation project and for allegedly failing to take the requisite "hard look" at various environmental impacts created by the project. The government counters that plaintiffs' proposal need not be considered because it would not result in the increased efficiency that is the project's purpose.

The Court consolidated plaintiffs' application for a preliminary injunction with a hearing on the merits pursuant to Fed. R. Civ. P. 65(a)(2). Pending before the Court are cross-motions for summary judgment pursuant to Fed. R. Civ. P. 56. The Court has considered the parties' motions, oppositions, replies, and counsels' oral arguments on August 20, 1999, as well as the applicable statutory and case law. The Court finds that the case law supports the government's and intervenor's position with respect to Smith Realty's Alternative Scenario. The government need not consider the Alternative Scenario because it is not a reasonable alternative and will not bring about the government's desired objectives of efficiency. The Court also upholds the agency's modification of the "No Action" alternative to include the effects of reasonably foreseeable development. Finally, the Court concludes that the Final Environmental Impact Statement ("FEIS") submitted by the government has taken a sufficiently "hard look" at environmental impacts of the proposed project.

For those reasons, which are explained in greater detail in the body of the opinion, the Court GRANTS the motions of the federal defendant and intervenor-defendant LCOR for summary judgment, *fn1 and DENIES plaintiffs' motion for summary judgment and a preliminary injunction.

FACTUAL AND PROCEDURAL BACKGROUND

I. Parties

Plaintiffs Donald P. Young, Diane G. Young, and James W. Burke are residents of the Carlyle Towers in Alexandria, Virginia, which is located across the street from the Carlyle site *fn2 that is proposed for the PTO Consolidation project.

Plaintiff Smith Realty is the bidder whose Crystal City site was not selected for the PTO Consolidation project. Defendant PTO is an agency within the Department of Commerce that is responsible for issuing patents, registering trademarks, disseminating information, and administering the laws of the United States related to intellectual property. Defendant GSA is the federal agency with the statutory authority to obtain and assign office space to federal agencies. Intervenor- defendant LCOR is the bidder whose proposal was chosen for the PTO Consolidation project.

II. Events

PTO is currently housed in eighteen separate buildings in the Crystal City area of Arlington, Virginia. *fn3 In July 1995, GSA and PTO sought Congressional approval for a long-term lease to consolidate PTO's facilities. GSA submitted a prospectus to Congress that called for a twenty-year lease of 2.168 million to 2.387 million square feet. *fn4 PTO initiated this project because "[m]any of [its] leased buildings are in need of alterations to meet fire, life safety, and handicapped accessibility guidelines. Mechanical and electrical upgrades are also needed for the agency's automation and organizational requirements." Final Fed. Defs.' Opp'n to Pls.' Mot. for Summ. J. at 4. In addition, PTO stated that "[s]ignificant growth in the number of patent and trademark applications filed has greatly increased PTO's workload. . . . Expansion space is required to house personnel, their files, and reference materials that support the patent and trademark application processes." Id. The Need and Purpose of the project was *fn5 summarized in the Draft Environmental Impact Statement ("DEIS"):

The purpose of the proposed PTO consolidation is to provide a facility that can improve operational efficiency and better meet the needs of PTO's employees and customers. . . . Therefore, the proposed action includes expansion space to accommodate projected increases in patent and trademark filings, consolidation of PTO's space into no more than eight buildings to maximize and improve efficiency, and upgraded physical facilities that meet all current regulations and PTO's automation needs. Id. (citing DEIS, Section 1.2).

On June 26, 1996, GSA issued Solicitation for Offers ("SFO") No. 96.004, seeking competitive lease proposals for PTO's consolidated space needs. According to GSA, the SFO: represents a detailed description of PTO's minimum needs for its consolidated headquarters that, for purposes of NEPA, reflects the underlying purpose and need of the project. The SFO includes a number of detailed performance specifications . . . [which] will specifically enhance the operational efficiency of PTO's headquarters space consistent with the general purpose and need of improving operational efficiency and consolidating operations set forth in the FEIS. Id. at 4-5 (emphasis added).

The PTO's minimum requirements for its headquarters included dedicated service elevators, multipurpose storage and receiving areas, a mailroom, a fitness facility, a health unit, a cafeteria, an auditorium, and other required meeting rooms. The SFO also contained specifications for structural live floor load, passenger elevator performance criteria, electrical requirements, communications rooms, and service elevators, and incorporated a provision for a fit-out allowance of $88 million. Offerors were required to provide for an interior build out in this amount as part of their offered rental rate.

On April 21, 1997, GSA issued a Notice in the Federal Register of its intent to prepare an EIS under NEPA related to

the proposed lease consolidation of PTO. On June 4 and 5, 1997, GSA conducted two public "scoping" meetings prior to its preparation of a DEIS and considered the testimony presented at the hearings, as well as written comments submitted during the scoping process. GSA solicited this information in order to quantify the environmental impacts it should analyze in connection with the consolidation project. Following the scoping process, GSA analyzed information relevant to the presence of hazardous substances at the offerors' sites. *fn6

Plaintiff Smith Realty filed a bid protest concerning the SFO with the General Accounting Office on June 30, 1997. On August 8, GSA amended the SFO to provide, among other things, that environmental impacts and mitigation measures identified as part of the government's review of the proposed leasing action under NEPA *fn7 and an offeror's ability and willingness to resolve such impacts and implement such mitigation measures, would be considered as part of the Phase Two technical evaluation. *fn8 After the four remaining offerors, including Smith Realty, submitted their Phase Two proposals on October 27, 1997, the offeror of the Potomac Yards site withdrew from the procurement. Smith Realty submitted one proposal that purported to satisfy all SFO requirements and another "Alternative Scenario" that failed to satisfy all SFO requirements.

On April 3, 1998, GSA issued the DEIS for public comment and received comments from federal, state, regional, and local government agencies, the offerors, private organizations, and interested members of the public. On April 29 and 30, 1998, GSA received oral testimony on the DEIS. The government then made changes in response to the comments and, on October 9, 1998, GSA requested that the remaining three Phase Two Offerors submit their Best and Final Offers ("BAFOs") by November 16, 1998. At this time, GSA informed Smith Realty that a proposal would not be considered for award if it failed to satisfy the minimum requirements of the SFO.

Smith Realty filed an Agency Protest with the GSA Contracting Officer on November 13, 1998, to complain about certain SFO requirements. Smith Realty and the remaining two offerors submitted their BAFOs three days later, and Smith

Realty again submitted a proposal that purported to satisfy all SFO requirements in addition to its Alternative Scenario. On December 18, the Contracting Officer denied Smith Realty's Agency Protest, and on December 28, Smith Realty filed a complaint in the United States District Court for the Eastern District of Virginia related to the SFO and the procurement. *fn9 On January 22, 1999, Contracting Officer James Smale informed Smith Realty that its Alternative Scenario failed to meet the minimum requirements.

On January 22, 1999, GSA issued the FEIS, which consisted of two volumes. The first volume described any changes to GSA's analysis and characterization of environmental impacts, published comments that GSA received on the DEIS, and responded to the substantive comments; the second volume consisted of the DEIS. On January 27, GSA discussed the procurement with Smith Realty, as it did with all of the offerors. *fn10 At that time, Smith Realty informed GSA that it would submit another alternative offer despite GSA's admonitions. On April 29, 1999, GSA transmitted the Program of Requirements to all offerors and requested submission of BAFOs. On May 21, 1999, the offerors submitted BAFOs, and Smith Realty again submitted its Alternative Scenario as well as a proposal that purported to meet all SFO requirements. GSA issued its Record of Decision ("ROD") on June 14, 1999 and identified Intervenor LCOR's Carlyle proposal as the proposal representing the greatest overall value to the government, consistent with the evaluation criteria established in the SFO. GSA judged LCOR's proposal to be the highest rated technically and the lowest priced.

STANDARD OF REVIEW

I. Summary Judgment

Summary judgment should be granted pursuant to Fed. R. Civ. P. 56 only if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In ruling upon a motion for summary judgment, the Court must view the evidence in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Bayer v. United States Dep't of Treasury, 956 F.2d 330, 333 (D.C. Cir. 1992). Likewise, in ruling on cross-motions for summary judgment, the court shall grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed. See Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975).

The cross-motions for summary judgment pending before the Court present no genuinely disputed material facts that would preclude summary judgment. Summary judgment is also appropriate where, as here, review is on the administrative record. See, e.g., Richards v. INS, 554 F.2d 1173, 1177 n.28 (D.C. Cir. 1977) ("Summary judgment is appropriate after a review of the administrative record."); see also Lun Kwai Tsui v. Attorney General of the United States, 445 F. Supp. 832, 835 (D.D.C. 1978) (quoting Richards).

II. Administrative Procedure Act

Under the Administrative Procedure Act ("APA"), a reviewing court shall "hold unlawful and set aside agency action, *fn11 findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. §§ 706(2)(A). In reviewing whether agency action was arbitrary and capricious, the Court is deferential to the administrative agency, see Environmental Defense Fund, Inc., v. Costle, 657 F.2d 275, 282 (D.C. Cir. 1981); Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C. Cir. 1976) (en banc), and presumes the agency action to be valid. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 419 (1971). Moreover, the "arbitrary and capricious" standard is a narrow one, which forbids a court from substituting its judgment for that of the agency. See id. at 416; see also Ethyl Corp., 541 F.2d at 34.

In applying the "arbitrary and capricious" standard, a court "may not supply a reasoned basis for the agency's action that the agency itself has not given," Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983), but a court should "uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned." Id. (quoting Bowman Transp. Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 286 (1974)). That standard directs this Court to determine "whether the decision was based on a consideration of the relevant factors and whether there was clear error of judgment." DIRECTV, Inc. v. FCC, 110 F.3d 816, 826 (D.C. Cir. 1997)(quoting State Farm, 463 U.S. at 43) (emphasis added). In making this determination, a Court reviews whether the agency action was arbitrary and capricious based upon the administrative record that was before the decisionmaker at the time the decision was made. See Citizens to Preserve Overton Park, 401 U.S. at 420.

In order for an agency decision to pass muster under the APA's "arbitrary and capricious" test, the reviewing court must determine that the decision "makes sense." Only by "carefully reviewing the record and satisfying [itself] that the agency has made a reasoned decision" can the court "ensure that agency decisions are founded on a reasoned evaluation of the relevant factors." DuBois v. United States Dept. of Agriculture, 102 F.2d 1273, 1285 (1st Cir. 1996) (citations omitted).

DISCUSSION

I. Arguments of the Parties

Plaintiffs argue that the extremely restrictive requirements of the SFO narrowly limited the pool of reasonable alternatives to be considered under NEPA. See Pls.' Mem. of P. & A. in Supp. of Mot. for Summ. J. at 22. They assert that their Alternative Scenario meets the stated Need and Purpose of the PTO project and, thus, must be considered as a reasonable alternative under NEPA. Plaintiffs further argue that the government is attempting to contract away its responsibilities under NEPA and has stacked the deck against the reuse of existing buildings. See id. at 24.

The government counters that because the Competition in Contracting Act ("CICA") requires an agency to "evaluate sealed bids and competitive proposals based solely on the factors specified in the [SFO]," 41 U.S.C. § 253b(a), "a proposal that fails to meet the agency's minimum requirements as reflected in the [SFO] cannot be considered for an award." Fed. Defs.' Opp'n to Pls.' Mot. for Summ. J. at 9. The government also argues that plaintiffs seek to compel the government to consider an alternative proposal that clearly fails to meet the SFO's minimum requirements. The government contends that if it accepted plaintiffs' argument, the process would become a "sole source contract for existing space" and "would give an unfair competitive advantage to the use of existing buildings to the detriment of all other proposals for new construction." Id. The government argues that plaintiffs' proposed reconciliation of CICA and NEPA would render CICA a nullity, which is problematic given that the government has already incorporated its NEPA responsibilities into the drafting of the SFO. See Fed. Defs.' Opp'n to Pls.' Mot. for Summ. J. at 9.

II. Statutory Scheme

A. National Environmental Policy Act

In 1969, Congress passed the National Environmental Policy Act ("NEPA"), codified at 42 U.S.C. § 4321 et seq., to ensure that all federal agencies consider the environmental impacts of major federal actions that affect the "quality of the human environment." 42 U.S.C. § 4332(2)(C). One of the statute's primary purposes is to make certain that an agency, "in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts." Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989); see also City of Grapevine, Texas v. Department of Trans., 17 F.3d 1502, 1503-04 (D.C. Cir. 1994) (discussing the agency's mandate to take a "hard look" at the environmental consequences of its decision to proceed with a project).

The NEPA process involves an almost endless series of judgment calls. . . . It is . . . always possible to explore a subject more deeply and to discuss it more thoroughly. . . . [The role of the courts in reviewing the judgment calls made by the agency] is simply to ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary and capricious.

Coalition of Sensible Transportation v. Dole, 826 F.2d 60, 66 (D.C. Cir. 1987) (internal quotations omitted).

In addition to providing crucial information to the agency, NEPA also "guarantees that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision." Robertson, 490 U.S. at 349 (emphasis added). This larger audience includes the President, who is responsible for the agency's policy; Congress, which has authorized the agency's actions; and the public, which receives the "assurance that the agency 'has indeed considered environmental concerns in its decisionmaking process,'" Sierra Club v. Watkins, 808 F. Supp. 852, 858 (D.D.C. 1991) (quoting Baltimore Gas & Electric Co. v. Natural Resources Defense Council, Inc., 462 U.S. 87, 97 (1983)), as well as the opportunity to comment. Thus, NEPA has "'twin aims': (1) to ensure that the agency takes a 'hard look' at the environmental consequences of its proposed action and (2) to make information on the environmental consequences available to the public, which may then offer its insight to assist the agency's decision-making through the comment process." DuBois v. United States Dept. of Agric., 102 F.3d 1273, 1285 (1st Cir. 1996).

NEPA sets forth procedural safeguards to effect this "hard look" and ensure proper consideration of environmental concerns; it does not, however, require particular substantive results. See City of Carmel-by-the-Sea v. United States Dept. of Transp., 123 F.3d 1142, 1150 (9th Cir. 1997). The cornerstone of NEPA's procedural protections is the Environmental Impact Statement ("EIS"), a detailed statement that discusses:

(i) the environmental impact of the proposed action,

(ii) any adverse environmental effects that cannot be avoided should the proposal be implemented,

(iii) alternatives to the proposed action,

(iv) the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and

(v) any irreversible and irretrievable commitments of resources that would be involved in the proposed action should it be implemented. 42 U.S.C. § 4332(C).

Under this provision, a government agency must prepare an EIS whenever a proposed government action qualifies as a "major Federal action significantly affecting the quality of the human environment."

B. Standard of Review

The agencies, themselves, have the primary responsibility to comply with NEPA. As long as an agency has taken a "hard look" at an action and has followed NEPA's procedures, a court will not overturn an agency's substantive decision unless it is arbitrary, capricious, or an abuse of discretion. *fn12 See Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 377 (1989). The Supreme Court has emphasized that "once an agency has made a decision subject to [NEPA's] procedural requirements, the only role for a court is to insure that the agency has considered the environmental consequences; it cannot 'interject itself within the area of discretion of the executive as to the choice of the action to be taken.'" Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227-28 (1980); see also Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 194 (D.C. Cir. 1991) (quoting Strycker's Bay). While this standard of review is highly deferential, it is not a rubber stamp. See Dubois, 102 F.3d at 1285. Under this standard, "a reviewing court 'must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.' This inquiry must 'be searching and careful,' but 'the ultimate standard of review is a narrow one." Marsh, 490 U.S. at 378; see also Sierra Club, 808 F. Supp. at 859 (quoting Marsh).

III. Consideration of Smith Realty's Alternative Scenario

Plaintiffs' primary allegation is that the government violated NEPA by failing to consider Smith Realty's proposed Alternative Scenario. NEPA requires that an agency consider all reasonable alternatives:

[A]n agency may not define the objectives of its action in terms so unreasonably narrow that only one alternative from among the environmentally benign ones in the agency's power would accomplish the goals of the agency's action, and the EIS would become a foreordained formality. Nor may an agency frame its goals in terms so unreasonably broad that an infinite number of alternatives would accomplish these goals and the ...


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