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Toxco, Inc v. Steven Chu et al

August 11, 2011


The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos.: 27, 33




This case is before the court on the defendants' motion to dismiss as moot or, in the alternative, for summary judgment. The plaintiff, Toxco, Inc., commenced this action against the Department of Energy and the Secretary of the Department of Energy, alleging that the defendants' actions violated the Administrative Procedure Act ("APA") and the Due Process Clause of the Fifth Amendment. The defendants move to dismiss these claims pursuant to Federal Rule of Civil Procedure 12(b)(1), alleging that the court lacks jurisdiction because the plaintiff's claims are moot. In the alternative, the defendants move for summary judgment under Rule 56. Because the plaintiff's APA claim is moot, the court grants the defendants' motion to dismiss as to that claim. With respect to the plaintiff's remaining Due Process claim, the court grants the defendant's motion for summary judgment.


A. Factual Background

The Department of Energy ("DOE") oversees the disposal of radioactive waste at nuclear waste facilities across the country. See 42 U.S.C. § 7133(a)(8)(A)-(E). One such facility is the Separations Process Research Unit ("SPRU"), which operated from 1950 to 1953 as a pilot plant to research the chemical extraction of uranium and plutonium from irradiated uranium. A.R. at 69.*fn1 These operations contaminated the SPRU facility and the surrounding environment with radioactive material, resulting in the need to remediate the site. Id.

In October 2004, the DOE awarded a contract for several waste disposal operations to Accelerated Remediation Company ("ARC"), with individual projects to be specified in task orders. See id. at 1-62. The contract permitted ARC to subcontract with other entities, provided that the DOE formally consented to each individual subcontract. Id. at 47 (incorporating by reference48 C.F.R. § 52.244-2, which requires an agency's Contracting Officer to consent before a contractor may enter into a subcontract). In September 2007, the DOE issued Task Order No. DE-AT30-07CC60013, SP15 ("Task Order SP15"), requiring ARC to engage in environmental remediation of approximately fifteen acres in the SPRU land areas. See generally 63-105. Specifically, Task Order SP15 required the cleanup of radioactively and chemically contaminated soil from two areas at SPRU: the Lower Level Railbed and the Lower Level Parking Lot. Id. at 69.

In keeping with the terms of the DOE-ARC contract, in the summer of 2008 ARC subcontracted with EnergySolutions, a Utah company, to complete the waste disposal work under Task Order SP15. See generally id. at 346-48. Later that summer, ARC sought and received the DOE's permission to exit its subcontract with EnergySolutions as part of a cost-savings initiative. See generally id. at 349-51, 401-05; see Defs.' Mot. to Dismiss or, in the Alternative, for Summ. J. ("Defs.' Mot.") at 8-9. ARC then solicited bids from other subcontractors that wished to engage in the Task Order SP15 remediation work at SPRU. A.R. at 402. In June 2009, Toxco, Inc. ("Toxco" or "the plaintiff"), a Tennessee company, submitted a bid to perform the Task Order SP15 work. See generally id. at 397-411. Pursuant to federal acquisition regulations and DOE guidelines, ARC required the DOE's consent before it could enter into a subcontract with Toxco. Id. at 47. On August 11, 2009, the DOE issued a letter giving its formal consent to the subcontract. Id. at 450 ("Consent Order"). The Consent Order included the following provision:

This consent shall in no way relieve the prime contractor of any obligations or responsibilities it may otherwise have under the contract or under law, shall neither create any obligation of the Government to, nor privity of contract with, the subcontractor or vendors, and shall be without prejudice to any right or claim of the Government under the prime contract. This consent does not constitute a determination as to the acceptability of the subcontract or the allowability of costs.


On August 12, 2009, having received the DOE's formal consent, ARC entered into a Purchase Order subcontract for the Task Order SP15 remediation work with Toxco. See generally id. at 451-63.The period of performance for the subcontract ran through December 31, 2009. Id. at 452. The subcontract also incorporated by reference a federal regulation titled "Termination for Convenience of the Government," which allowed the government to "terminate performance of work under this contract in whole or, from time to time, in part if the Contracting Officer determines that a termination is in the Government's interest." See id. at 454.

A week later, on August 19, 2009, the DOE reversed course and withdrew its consent for the ARC-Toxco subcontract. See id. at 498-500. Swiftly thereafter, ARC cancelled its subcontract with Toxco. Id. at 501-03. ARC subsequently re-contracted with EnergySolutions for completion of the remainder of Task Order SP15's remediation project at SPRU. Def.'s Mot. at 12. ...

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