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Fisher-Cal Industries, Inc., Plaintiffs v. United States of

March 19, 2012

FISHER-CAL INDUSTRIES, INC., PLAINTIFFS,
v.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Beryl A. Howell

MEMORANDUM OPINION

On July 30, 2011, the U.S. Air Force determined that it would not renew plaintiff Fisher-Cal Industries' contract to perform certain multimedia services at Dover Air Force Base, instead choosing to "convert to in-house" the services performed by the plaintiff "based upon anticipated savings." Defs.' Mot. Dismiss, ECF No. 6, Ex. 1. Following the expiration of the plaintiff's contract, the plaintiff initiated the instant lawsuit against the United States, the U.S. Department of Defense, and the U.S. Air Force, alleging that the defendants' insourcing decision was unlawful because it violated federal statutes and implementing guidelines and procedures. The defendants' have moved to dismiss the Complaint on grounds that the Court lacks subject matter jurisdiction. As explained below, the Court agrees and the Complaint is dismissed.

I.BACKGROUND

On July 6, 2009, the U.S. Air Force issued a Request for Proposal to acquire multimedia services at Dover Air Force Base in Delaware. Compl. ¶¶ 10-11. Plaintiff Fisher-Cal Industries, Inc., a New Jersey corporation, bid for and ultimately obtained the contract on September 15, 2009. Id. ¶ 13.

The contract between the Air Force and the plaintiff provided for one base year of services, from October 1, 2009 to September 30, 2010, with four optional one-year extensions. Id. ¶ 12. On July 30, 2010, approximately nine months into the base year of the contract, the Air Force notified the plaintiff that it had decided to insource the multimedia services and would not be exercising its option to renew the contract for Fiscal Year 2011. Id. ¶¶ 14-16; Defs.' Mot. Dismiss, ECF No. 6, Ex. 1. The Air Force, however, continued to use the plaintiff's services under a bridge contract for an additional six months after the base contract year expired, until March 31, 2011. Id. ¶ 14. After March 31, 2011, the Air Force began to perform in-house the multimedia services that the plaintiff had previously provided. Id.

On April 26, 2011, the plaintiff filed a Complaint in this Court against the United States, the U.S. Department of Defense, and the U.S. Air Force, alleging that the defendants' "[i]nsourcing [d]ecision is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. ¶ 30. Specifically, the plaintiff contends that the defendants' decision to insource the services covered by the contract was unlawful because it failed to comply with 10 U.S.C. §129a -- which requires the defendants to use "the least costly form of personnel consistent with military requirements and other needs of the Department" -- and violated "various implementing guidelines and procedures" promulgated in accordance with 10 U.S.C. § 2463.*fn1 Pl.'s Opp'n Mot. Dismiss, ECF No. 8, at 2; see Compl. ¶¶ 15-53. The plaintiff seeks, inter alia, declaratory judgment that the defendants' insourcing decision is unlawful, in violation of the Administrative Procedures Act ("APA"), and injunctive relief setting aside the agency action, as well as attorney's fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d). Id. ¶¶ 54-65.

On August 5, 2011, the defendants moved to dismiss the Complaint under Federal Rules of Civil Procedure 12(b)(1) and (b)(6), arguing that the Court lacks subject matter jurisdiction over the plaintiff's claims because the Court of Federal Claims has exclusive jurisdiction over matters related to federal procurement, and additionally that the case is moot because the insourcing has already taken place and there is no possible relief for plaintiff. Defs.' Mem. Supp. Mot. Dismiss, ECF No. 6. This motion is pending before the Court.

As explained below, the Tucker Act and the Administrative Disputes Resolution Act of 1996 ("ADRA") confer exclusive jurisdiction over matters related to procurement of federal contracts to the Court of Federal Claims, and this Court therefore lacks subject matter jurisdiction over the Complaint. Accordingly, defendants' motion to dismiss is GRANTED.

II.STANDARD OF REVIEW

On a motion to dismiss for lack of subject matter jurisdiction, under Rule 12(b)(1) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. Mostofi v. Napolitano, No. 11-cv-727, 2012 U.S. Dist. LEXIS 9563, at *4 (D.D.C. Jan. 27, 2012) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)); Ki Sun Kim v. United States, No. 08-cv-1660, 2012 U.S. Dist. LEXIS 2094, at *8 (D.D.C. Jan. 9, 2012). As the Supreme Court has explained "many times," the "district courts of the United States . . . are 'courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.'" Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 552 (2005) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994)) (internal citations omitted); see also Micei Int'l v. DOC, 613 F.3d 1147, 1151 (D.C. Cir. 2010) ("[T]wo things are necessary to create jurisdiction in an Article III tribunal other than the Supreme Court . . . The Constitution must have given to the court the capacity to take it, and an act of Congress must have supplied it.") (internal citations and quotation marks omitted). For this reason, a "federal district court's initial obligation is to ascertain its subject matter jurisdiction." Malyutin v. Rice, 677 F. Supp. 2d 43, 45 (D.D.C. 2009), aff'd, No. 10-5015, 2010 U.S. App. LEXIS 13869 (D.C. Cir. July 6, 2010). When a court lacks subject matter jurisdiction, it must dismiss the case. See Ravulapalli v. Napolitano, 773 F. Supp. 2d 41, 48 (D.D.C. 2011); McManus v. District of Columbia, 530 F. Supp. 2d 46, 62 (D.D.C. 2007).

The Court must be assured that it is acting within the scope of its jurisdictional authority and therefore must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion for failure to state a claim. See Macharia v. United States, 334 F.3d 61, 64 (D.C. Cir. 2003); Westberg v. FDIC, 759 F. Supp. 2d 38, 41 n.1 (D.D.C. 2011); Dubois v. Wash. Mut. Bank, No. 09-cv-2176, 2010 WL 3463368, at *2 (D.D.C. Sept. 3, 2010); Hoffman v. District of Columbia, 643 F. Supp. 2d 132, 135 (D.D.C. 2009). In this respect, it is "the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence." Sai v. Clinton, 778 F. Supp. 2d 1, 5 (D.D.C. 20011) (quoting Am. Farm Bureau v. Envtl. Prot. Agency, 121 F. Supp. 2d 84, 90 (D.D.C. 2000)). In deciding whether to grant a motion to dismiss for lack of jurisdiction, "the district court may consider materials outside the pleadings" but "must still accept all of the factual allegations in the complaint as true." Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005) (citing Herbert v. Nat'l Acad. of Sci., 974 F.2d 192, 197 (D.C. Cir. 1992) and United States v. Gaubert, 499 U.S. 315, 327 (1991)); see also Coal. for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (noting that courts may consider materials outside the pleadings in ruling on a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction); Citizens for Responsibility & Ethics in Wash. v. FEC, No. 11-cv-951, 2011 U.S. Dist. LEXIS 149672, at *6 (D.D.C. Dec. 30, 2011). The court, however, "need not accept as true a legal conclusion couched as a factual allegation, nor inferences that are unsupported by the facts set out in the complaint." Mostofi, No. 11-cv-0727, 2012 U.S. Dist. LEXIS 9563, at *5 (citations and quotation marks omitted).

III.DISCUSSION

The Complaint alleges that the plaintiff "solely challenges Defendants' compliance with their own guidelines and procedures regarding the decision to insource." Compl. ¶ 4 (emphasis in original). According to the plaintiff, the defendants' decision to insource the multimedia services at Dover AFB was not "based upon economic analysis" as to the "most cost effective provider," which, if properly conducted, would "reveal[] that a private contractor (such as Plaintiff) is the most cost effective provider." Id. ¶ 36.

The defendants assert that the Court lacks subject matter jurisdiction over these allegations because they relate to procurement of a federal contract, over which the Court of Federal Claims has exclusive jurisdiction. Specifically, the Tucker ...


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