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Eco Tour Adventures, Inc. v. Zinke

United States District Court, District of Columbia

April 18, 2017

RYAN ZINKE, in his official capacity as Secretary of the Interior, et al. Defendants.


          BERYL A. HOWELL Chief Judge

         The plaintiff, Eco Tour Adventures, Inc. (“Eco Tour”), a Wyoming-based small business, seeks rescission of two concession contracts for cross-country ski touring services in Grand Teton National Park (“the disputed contracts”) that were awarded to two incumbent concessioners, despite a ruling from the U.S. Court of Federal Claims (“CFC”) holding that the incumbents' proposals were improperly considered by the National Park Service (the “NPS”). See Eco Tour Adventures, LLC v. United States (“Eco Tour I”), 114 Fed.Cl. 6, 40 (2013) (determining that “NPS acted arbitrarily and capriciously in concluding that [incumbent concessioners'] proposals were responsive” and, as a result, plaintiff “was prejudiced”). Despite the CFC's ruling, NPS subsequently proceeded to award the disputed contracts to the incumbents, prompting the plaintiff to initiate this lawsuit against the Secretary of the Interior, the Department of the Interior, the Director of the National Park Service, and the National Park Service (collectively, “the defendants” or “NPS”), under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 500 et seq., requesting declaratory and injunctive relief, including requiring NPS to award the contracts to plaintiff. Compl. at 27-28 (Prayer for Relief), ECF No. 1.[1] The parties have now filed cross motions for summary judgment. Pl.'s Mot. Summ. J., (“Pl.'s Mot.”), ECF No. 24; Defs.' Cross-Mot. Summ. J. (“Defs.' Mot.”), ECF No. 27. For the reasons outlined below, the plaintiff's motion for summary judgment is granted with respect to its request for declaratory relief finding that NPS violated the APA, but denied without prejudice in all other respects, subject to supplemental briefing consistent with this Memorandum Opinion, and NPS's cross-motion for summary judgment is denied.

         I. BACKGROUND

         The background to this case is described in detail in the CFC decision holding that NPS “acted arbitrarily and capriciously” and in breach of “the implied contract for bids to be fairly and honestly considered, ” when the agency, by its conduct, thwarted the plaintiff's “substantial chance” to receive the disputed contracts, Eco Tour I, 114 Fed.Cl. at 43, as well as this Court's Memorandum Opinion denying the defendants' motion to dismiss in this case, Eco Tour Adventures, Inc. v. Jewell (“Eco Tour II”), 174 F.Supp.3d 319 (D.D.C. 2016). This factual and procedural history as relevant to the pending motions is summarized below.


         In December 2012, NPS issued a prospectus soliciting proposals for three ten-year concession contracts, only two of which, GRTE024-13 (“Contract 24”) and GRTE032-13 (“Contract 32”), are at issue in this case, [2] to provide guided cross-country ski touring services in Grand Teton National Park. Admin. Record (“AR”) 5-210 (Prospectus, dated December 20, 2012, issued by NPS Intermountain Region).[3] The prospectus “included detailed instructions setting forth the protocol for submitting proposals and the selection factors to be used by the NPS to evaluate proposals.” Eco Tour I, 114 Fed.Cl. at 14. These factors included: the offeror's commitment to “protecting, conserving, and preserving resources of the park area”; the offeror's commitment to “providing necessary and appropriate visitor services at reasonable rates”; the background and experience of the offeror; the “financial capability of the offeror to carry out its proposal”; and the offeror's “proposed minimum franchise fee.” AR 43-57 (Prospectus outlining the identical selection factors for Contracts 24 and 32).

         At the time of this solicitation, the services under Contract 24 were being provided by Jackson Hole Mountain Resort (“JHMR”) and under Contract 32 by Hole Hiking Experience (“HHE”), both of which, as incumbent concessioners, were designated by NPS as “preferred offerors, ” a designation the plaintiff does not contest. AR 24 (Prospectus, noting that NPS “has determined the [] existing Concessioners are qualified contracts and therefore the existing Concessioners are Preferred Offerors for the new Contracts”). Under NPS regulations, this designation allows preferred offerors a “right of preference, ” which allows them to match any better offer from a new bidder so long as they initially “submit a responsive proposal to th[e] Prospectus” that satisfies the minimum requirements established by the NPS. AR 24 (Prospectus, citing 36 C.F.R. § 51).

         The plaintiff was founded in 2008 and provides “auto-based interpretative tours into Grand Teton and Yellowstone national parks.” AR 730 (Letter, dated March 20, 2013, from Taylor Phillips, plaintiff's President, to John Wessels, Regional Director, NPS Intermountain Region). Hoping to expand its business, the plaintiff submitted bids for Contracts 24 and 32. AR 724-1093. An evaluation panel, convened from March 25, 2013 to April 5, 2013, determined that the plaintiff submitted proposals with the highest cumulative score for both contracts. AR 1272-1302 (undated Panel Evaluation Summary for Contract 24); AR 1317-1342 (undated Panel Evaluation Summary for Contract 32); see also AR 1188 (Letter, dated June 20, 2013, from Regional Director, NPS Intermountain Region to Taylor Phillips, plaintiff's President, stating “[y]our proposal has been evaluated as the best proposal for” Contract 24); AR 1189 (same for Contract 32).

         For Contract 24, NPS received timely proposals from Eco Tour, JHMR, and two other offerors. AR 1277 (Panel Evaluation Summary for Contract 24 listing Eco Tour, JHMR, and two redacted names as offerors). The panel reviewed each proposal against a total of 12 primary, secondary and subsidiary selection factors, as laid out in the prospectus, and assigned a score for each factor. AR 1277. Eight of the plaintiff's twelve responses were rated “excellent” or “very good” and, of the remaining four responses, two were rated “good” and two were rated “fair.” AR 1278-1302 (Panel Evaluation Summary). In contrast, JHMR's responses received no “excellent” or “very good” ratings, but only seven “good” and five “fair” ratings. Id. In fact, the plaintiff's score on each factor was higher than JHMR's score, with the exception of selection factor three, for which both received a score of 2.5. AR 1277. Based on the plaintiff's better evaluations, the plaintiff's total evaluation score for Contract 24 was 20.5 (out of a total 27), which was seven points higher than JHMR's, at 13.5. AR 1277.

         For Contract 32, NPS received timely proposals from Eco Tour, HHE, and two other offerors. AR 1317 (Panel Evaluation Summary for Contract 32 listing Eco Tour, HHE, and two redacted names as offerors). Again, nine of the plaintiff's twelve responses, were rated “excellent” or “very good” and, of the remaining three responses, two were rated “good” and one was rated “fair.” AR 1318-42. In contrast, HHE's responses received no “excellent” ratings, with four “very good, ” three “good” and five “fair” ratings. Id. Similar to the evaluation for Contract 24, the plaintiff received a higher score than the incumbent in every category, except for selection factor three, for which both received a 2.5. AR 1317. The plaintiff's total evaluation score for Contract 32, was 21.5 (out of a total 27), which was six points higher than HHE's, at 15.5. AR 1317.

         The evaluation panel noted a number of deficiencies in both JHMR and HHE's proposals, largely related to the fourth primary selection factor regarding “The Financial Capability of the Offeror To Carry Out its Proposal.” AR 1294 (Contract 24); AR 1334 (Contract 32). JHMR, the panel noted, failed to submit “a current balance sheet” or “a current credit report, ” provided incomplete or inconsistent answers “on the Initial Investment form, ” and failed to submit “a bank statement as requested . . . .” AR 1295-98. HHE, the panel noted, submitted incomplete annual financial reports, failed to provide any explanation for the balance sheet it provided, and made “numerous mistakes” on some of the required forms. AR 1337, 1339. These omissions prompted the panel to express “concern[] with the financial position of the Offeror [HHE].” AR 1336.

         On June 20, 2013, NPS sent letters to the plaintiff, JHMR, and HHE informing the companies of the panel evaluations. The plaintiff learned that its “proposal ha[d] been evaluated as the best proposal for this opportunity; however, in accordance with 36 C.F.R. § 51.26, the preferred offeror, whom the Director has determined to be eligible to exercise a right of preference to the award of the contract, [would] have the opportunity to match the terms of [its] proposal.” AR 1188 (Letter, dated June 20, 2013, from John Wessels, Regional Director, Intermountain Region to the plaintiff). The incumbent concessioners were told that “[a]lthough the panel determined your proposal to be responsive to the minimum requirements of the Prospectus, the panel did not find your proposal to be the best proposal submitted for this solicitation.” AR 1190-92 (Letter, dated June 20, 2013, from NPS to JHMR); AR 1193-95 (Letter, dated June 20, 2013, from NPS to HHE). Notwithstanding the finding of the NPS Regional Director that the incumbents' proposals were “responsive to the minimum requirements of the Prospectus, ” AR 1190, 1193, these letters detailed “items” that each incumbent was required to “expand on . . . to bring the quality of your response up to the level of the best proposal, ” AR 1192, 1195. JHMR, for example, was told by the Regional Director to submit a current balance sheet, credit report and bank statement, and HHE was told to submit a complete set of financial statements, to clarify its revenue and expense projections, a corrected Pro Forma without “mathematical errors, ” and “a current bank statement with a list of current liabilities, ” since HHE had failed to submit a balance sheet that corresponded with the bank statement it submitted, as required by the prospectus. Id.

         Despite the cited defects in their bid proposals, the NPS Regional Director told the incumbents that they were “eligible to exercise the right of preference for the award of the new Concession Contract” under 36 C.F.R. § 51.32, assuming that they provided the information missing from their bids and committed to matching the “elements of [the] better offer” submitted by the plaintiff. AR 1190-92; AR 1193-94.[4] The incumbents quickly agreed to match the terms of the plaintiff's better offer. AR 1204-07 (Letter, dated June 28, 2013, from JHMR to NPS); AR 1400-01 (Letter, dated July 8, 2013, from HHE to NPS).

         The plaintiff also responded to the NPS letter and raised concern over NPS's reliance on its regulation at 36 C.F.R. § 51.32 because “it appears that at least one of the preferred offerors failed to submit a responsive proposal” and, therefore, that incumbent would “ha[ve] no right of preference, under 36 C.F.R. § 51.31, and ha[ve] no right to match [the plaintiff]'s proposal. ” AR 1242 (Letter, dated July 3, 2013, from plaintiff to Chief of Concessions, NPS Intermountain Region). NPS disagreed, citing the definition of a “responsive proposal” from 36 C.F.R. § 51.3, AR 1244-45 (Letter, dated July 10, 2013, from Chief of Concessions, NPS Intermountain Region to plaintiff's attorney), and expressing the view that any omitted information in the incumbents' proposals was “not considered material” and “the lack of quality and omissions were reflected in lower scores, ” AR 1267-68 (Letter, dated July 29, 2013, from Chief of Concessions, NPS Intermountain Region to plaintiff).


         The plaintiff promptly brought a challenge before the CFC to NPS's determination that the incumbent concessioners' proposals were responsive, claiming that the incumbent concessioners' failure to include all information required by the prospectus rendered their proposals not “responsive” within the meaning of the governing NPS regulation at 36 C.F.R. § 51.3, and that NPS acted arbitrarily and capriciously, and breached its implied contractual obligation to consider bids fairly and honestly, by allowing the incumbents to match the better terms proposed in the plaintiff's bids, despite the incumbents unresponsive proposals. Eco Tour I, 114 Fed. Cl. at 23-24. The plaintiff sought injunctive and declaratory relief in the form of a remand directing NPS to review its decisions that the incumbents' proposals were responsive and that the incumbents were entitled to review proprietary information in the plaintiff's proposal in order to match plaintiff's better terms, and also sought reimbursement for the costs incurred in preparing its bids for the disputed contracts, attorneys' fees, and litigation costs. Id. at 19. On August 19, 2013, the CFC stayed the case “based on NPS's assertion that the source-selection authority had not rendered final decisions with respect to the award of the disputed contracts.” Id. at 18 n.8.


         Although the June 20, 2013 NPS letters to the plaintiff and incumbent concessioners expressly stated that the plaintiff offered the “best proposal” and the incumbents' proposals, which omitted specific items required by the prospectus, were nonetheless “responsive, ” only after the CFC had stayed the plaintiff's challenge, did the NPS take steps to formalize these findings with an explanation. Specifically, on August 30, 2013, the NPS Chief of Concessions, Intermountain Region, recommended that the Acting Director of the Intermountain Region officially find that the plaintiff had submitted the “best proposal” and, while acknowledging that the incumbent concessioners “did not provide all of the information requested in the Prospectus, ” that the Acting Director also find “that all [] of the proposals [submitted] are responsive.” AR 1273 (Memorandum, dated August 30, 2013, from Chief of Concessions to Acting Director, Intermountain Region for Contract 24); AR 1312-51 (same for Contract 32).[5] Regarding Contract 24, the recommendation noted that JHMR's bid did not contain the requested balance sheet, credit report, or bank statement, AR 1305-06, and had incomplete information as to anticipated purchases, AR 1306. Nevertheless, these omissions were deemed “immaterial” because “the panel was able to evaluate the proposal” without the required documents, AR 1306. Regarding Contract 32, the NPS Chief of Concessions acknowledged that HHE's bid “did not contain some of the information requested by the [NPS], ” since HHE filed incomplete annual financial reports and “ambiguous” current liability information on its balance sheets, ” AR 1345, but, similarly to the recommendation for Contract 24, recommended finding that HHE's omissions or mistakes were immaterial, and therefore HHE's bid was “responsive.” AR 1345.[6]

         The Acting Regional Director approved the recommendation, AR 1273 (Memorandum, dated August 30, 2013, from Chief of Concessions to Acting Director, NPS Intermountain Region, bearing acting director's signature approving proposed responsiveness findings for Contract 24); AR 1313 (same for Contract 32). Following this approval, on September 4, 2013, the Chief of Concessions recommended finding that both incumbents “ha[d] amended [their] proposal[s] to match the better terms and conditions of the best proposal, ” thus requiring that the incumbents be awarded the disputed contracts under § 51.32. AR 1352-59 (Source Selection Memorandum, dated September 4, 2013, from Chief of Concessions to Acting Director, Intermountain Region for Contract 24); AR 1384-1420 (Source Selection Memorandum, dated September 4, 2013, from Chief of Concessions to Acting Director, Intermountain Region for Contract 32). These recommendations were likewise accepted by the Acting Director for the NPS Intermountain region, as reflected by that Acting Director's signature on the source selection recommendation memoranda. AR 1353 (Source Selection Memorandum signed by Acting Director for Contract 24); AR 1385 (same for Contract 32).


         The CFC subsequently lifted the stay based on NPS's notice that, consistent with the August 30 and September 4, 2013 memoranda, the “source-selection authority had [] rendered final decisions with respect to the award of the disputed contracts, [and] on September 4, 2013, decided to award the disputed contracts to the incumbent concessioners.” Eco Tour II, 114 Fed.Cl. at 18. Then, on November 26, 2013, the CFC issued its decision granting judgment in the plaintiff's favor, finding that the incumbents had excluded material information from their initial proposals, which were therefore unresponsive within the meaning of 36 C.F.R. § 51.3, and that the incumbents therefore were ineligible for the opportunity to match the better terms offered by the plaintiff. Id. at 42 n. 18 (noting that sealed version of opinion was issued on November 26, 2013 “direct[ing] the entry of final judgment in favor of plaintiff” but deferring entry of that judgment pending final disposition of plaintiff's “bid preparation costs”). In particular, the CFC disagreed with the recommendations in the August 30, 2013 memoranda and instead concluded that “each of the NPS's materiality determinations, as well as its resulting responsiveness determinations, was arbitrary, capricious, and an abuse of discretion.” Id. at 23; 33-34. Moreover, because the plaintiff had “submitted responsive proposals that received the highest cumulative scores of any of the proposals received by NPS, ” the CFC concluded that NPS's arbitrary and capricious actions were prejudicial since the plaintiff “demonstrated a ‘substantial chance' that it would have received the disputed contracts if not for the Park Services' arbitrary and capricious responsiveness determination with regard to the proposals of [the incumbents].” Id. at 43.

         Although the CFC was clear that the plaintiff's bids were not fairly considered by NPS, the CFC determined that it lacked jurisdiction to provide the equitable and declaratory relief requested by the plaintiff. Id. at 21, 42; see also Eco Tour II, 174 F.Supp.3d at 325-29. Specifically, because the disputed concession contracts were not “procurement contracts” for purposes of the Tucker Act, 28 U.S.C. § 1491, Eco Tour I, 114 Fed.Cl. at 21, the CFC held that, after considering conflicting authority on the issue, it lacked jurisdiction to award the plaintiff equitable relief, and thus the plaintiff could recover at the CFC only the costs incurred for its initial bid. Id. at 41-42. Consequently, the CFC denied the plaintiff's requested remand to the agency because doing so was perceived to “tread[] . . . into the realm of injunctive relief, ” id. at 42. Thereafter, upon consideration of the parties' stipulation regarding the plaintiff's costs stemming from its unsuccessful bids for the disputed contracts, J. Stip. Re: Money Damages Owed Under December 12, 2013 Op. & Order & J. Request For Entry of J., Eco Tour I, No. 13-cv-532-LJB (Fed. Cl. April 15, 2014), ECF No. 58, the CFC entered judgment, on April 17, 2014, in favor of the plaintiff and awarded $36, 250 in bid preparation costs, Judgment, Eco Tour I, No. 13-cv-532-LJB (Fed. Cl. April 17, 2014); see also Eco Tour II, 174 F.Supp.3d at 322-23.


         After the CFC's judgment was entered, but before the disputed concession contracts with the incumbent concessioners were executed, the plaintiff engaged in multiple steps short of expensive litigation to remedy the denial of the contracts to the plaintiff. Pl.'s Mot. Ex. A, Second Decl. of Taylor Phillips, plaintiff's President and owner, dated May 30, 2016 (“Phillips Second Decl.”) ¶ 14, ECF 24-1 (stating that plaintiff “was unable to afford the expense of further litigation against the federal government” after the CFC ruling “due in large part to the very illegal action at issue in this matter”).[7] These steps included trying to enlist the assistance of the Wyoming congressional delegation, which efforts prompted congressional inquiries requiring NPS to explain its actions. See, e.g., AR 00012-14 (Letters, dated June 20, 2014, from Regional Director, NPS Intermountain Region to Wyoming Congresswoman Cynthia Lummis and Wyoming Senators John Barrasso and Michael B. Enzi, summarizing “the decisions the [NPS] has made related to” plaintiff). The plaintiff also attempted “extensive and lengthy efforts to persuade NPS to comply with the law.” Pl.'s Mem. Supp. Mot. Summ. J. (“Pl.'s Mem.”), at 9, ECF No. 24.

         On June 20, 2014, NPS rejected the plaintiff's proposal “to forego payment” on the CFC judgment “in exchange for a contract, ” indicating that “this is not possible as the [CFC] entered judgment against the United States . . . .” AR 00011 (Letter, dated June 20, 2014, from Regional Director, NPS Intermountain Region to plaintiff's President). NPS further stated its plan, having “carefully considered all possible resolutions, ” to “fully comply with the [CFC's] decision and pay your bid preparation costs and a negotiated amount for your attorney fee.” Id. While acknowledging that plaintiff was “very passionate about this matter and [was] disappointed with the outcome, ” the agency offered, apparently by way of consolation, that “the [CFC]'s decision has resulted in policy changes to strengthen proposal requirements and evaluation procedures.” Id. Explanation of the specific “policy changes” that NPS has adopted are not entirely clear from the record. NPS informed the Wyoming congressional delegation by letter sent that same day, that though “NPS did not always consider an offeror's failure to produce one of many financial documents requested in the prospectus as a material failure that would render the proposal unresponsive, . . . [i]n the future, NPS may be required to determine an offer ineligible for consideration if the offeror fails to provide all financial information required by the prospectus.” AR 00012-14 (Letters from Regional Director, NPS Intermountain Region to the Wyoming congressional delegation). Less than a month later, on July 16, 2014, NPS executed Contract 24 and Contract 32 with JHMR and HHE, respectively. AR 00022, 00056.


         After “locat[ing] counsel who would agree to take [the case] on a pro bono basis because it could not afford additional litigation, ” Pl.'s Opp'n to Defs.' Cross-Mot. and Reply to Defs.' Opp'n to Pl.'s Mot. Summ. J. (“Pl.'s Opp'n”) at 40, ECF No. 28, the plaintiff filed the instant action, alleging that NPS violated the APA by misinterpreting and misapplying its own regulations, Compl. ¶¶ 47-51, despite the “clear and unequivocal terms of the regulations which apply” and the CFC's “clear finding that NPS's conduct was illegal, ” id. ¶¶ 2, 4. Given the CFC's view that it lacked authority to issue injunctive relief in the form of rescission of the disputed contracts, the plaintiff seeks injunctive and declaratory relief in this Court. Id. ¶¶ 4-5 (seeking “an order . . . declaring that the two contracts awarded to NPS's longtime incumbent contractors are illegal and thus void[, as well as] an injunction requiring the defendants to . . . award the two contracts to Eco Tour for their full 10-year terms.”).

         NPS initially moved to dismiss the plaintiff's complaint for lack of standing and for failure to state a claim, contending that the plaintiff should be precluded from pursuing equitable and declaratory relief having already “voluntarily elected to receive reimbursement of its bid preparation costs in resolving its earlier claim” and having elected to pursue relief in the CFC when an injunction was available in district court. Eco Tour II, 174 F.Supp.3d at 332-33. This Court rejected these arguments, finding “no substantial inconsistency between the monetary award the plaintiff voluntarily accepted in connection with its earlier action before the CFC and the plaintiff's present request for injunctive and declaratory relief in this Court.” Id. at 335. Contrary to NPS's claim that the plaintiff would receive a windfall if granted the award of the concession contracts after having received its bid costs, the Court held that “to the extent deemed necessary[, ] any contracts awarded under this action could address any prior partial relief received by Eco Tour.” Id. (internal quotation marks omitted). Moreover, the Court pointed out the obvious flaw in NPS's position that the plaintiff “elected” to pursue monetary relief before the CFC rather than injunctive relief, noting that “NPS had not yet finalized its decision to award the disputed contracts to the incumbent concessioners . . . during the pendency of the proceedings before the CFC” and, thus, the plaintiff could not have sought an injunction at that time. Id. at 334. Further, “even assuming such relief was available at the time Eco Tour initially filed suit in the CFC, ” the Supreme Court, in a related context, had held “that parties bringing claims against the federal government may separately seek monetary and injunctive relief in sequential actions before the CFC and the district courts.” Id. at 334-35 (citing United States v. Tohono O'Odham Nation, 563 U.S. 307, 318 (2011)). Although “the defendants may yet demonstrate that the plaintiff is not entitled to relief under the APA, ” the Court concluded that the relief available to the plaintiff from the CFC was not complete relief, and thus the plaintiff is not “barred entirely from seeking complete relief for the defendants' allegedly arbitrary and capricious actions.” Id. at 336.

         The parties' cross motions for summary judgment are now ripe for review.



         Pursuant to Federal Rule of Civil Procedure 56, summary judgment may be granted when the court finds “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (e)(3); see Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per curiam); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The first part of the Rule 56 summary judgment standard regarding the absence of disputed material facts, however, is irrelevant in APA cases since “'the district judge sits as an appellate tribunal'” and “[t]he entire case on review is a question of law.'” Rempfer v. Sharfstein, 583 F.3d 860, 865 (D.C. Cir. 2009) (quoting Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083-84 (D.C. Cir. 2001). As such, “the complaint, properly read, actually presents no factual allegations, but rather only arguments about the legal conclusion to be drawn about the agency action.” Id. (quoting Marshall Cnty. Health Care Auth. v. Shalala, 988 F.2d 1221, 1226 (D.C. Cir. 1993)). Consequently, “[g]enerally speaking, district courts reviewing agency action under the APA's arbitrary and capricious standard do not resolve factual issues, but operate instead as appellate courts resolving legal questions.” James Madison Ltd. ex rel. Hecht v. Ludwig, 82 F.3d 1085, 1096 (D.C. Cir. 1996); see also Lacson v. U.S. Dep't of Homeland Sec., 726 F.3d 170, 171 (D.C. Cir. 2013) (noting, in APA cases, that “determining the facts is generally the agency's responsibility, not ours”).

         Judicial review is limited to the administrative record, since “[i]t is black-letter administrative law that in an [APA] case, a reviewing court should have before it neither more nor less information than did the agency when it made its decision.” CTS Corp. v. EPA, 759 F.3d 52, 64 (D.C. Cir. 2014) (internal quotation marks omitted); see 5 U.S.C. § 706 (“[T]he court shall review the whole record or those parts of it cited by a party . . . .”); Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743 (1985) (noting, when applying arbitrary and capricious standard under the APA, “‘[t]he focal point for judicial review should be the administrative record already in existence . . . .'” (quoting Camp v. Pitts, 411 U.S. 138, 142 (1973))); Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971) (noting “review is to be based on the full administrative record that was before the [agency] at the time” of the challenged decision).


         An agency action, finding or conclusion challenged under the APA must be set aside upon finding that it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). When a challenged agency action is based on the application or operation of a regulation, the agency's interpretation of its own ambiguous regulation is generally given substantial judicial deference. See Auer v. Robbins, 519 U.S. 452, 463 (1997); Drake v. F.A.A., 291 F.3d 59, 68 (D.C. Cir. 2002). Given the deference owed to agency's interpretation of its own ambiguous regulation, a plaintiff challenging this interpretation carries a “heavy burden in advancing [that] claim.” In re Polar Bear Endangered Species Act Listing & Section 4(d) Rule Litig. - MDL No. 1993, 709 F.3d 1, 11 (D.C. Cir. 2013).

         This general rule on deference has limits, however, and is unwarranted when, for example, the agency's “interpretation is ‘plainly erroneous or inconsistent with the regulation.'” Decker v. Nw. Envtl. Def. Ctr., 133 S.Ct. 1326, 1337 (2013) (quoting Chase Bank USA, N. A. v. McCoy, 131 S.Ct. 871, 880 (2011)); see also Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2166 (2012); Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994) (“[W]e must defer to the [agency]'s interpretation unless an ‘alternative reading is compelled by the regulation's plain language or by other indications of the Secretary's intent at the time of the regulation's promulgation.”) (internal quotation marks omitted). An agency interpretation that conflicts with an unambiguous regulation is “substantively invalid” because “to defer in such a case would allow the agency ‘to create de facto a new regulation.'” Perez v. Mortg. Bankers Ass'n, 135 S.Ct. 1199, 1208 (2015)(quoting Christensen v. Harris County, 529 U.S. 576, 588 (2000)); see Huerta v. Ducote, 792 F.3d 144, 153 (D.C. Cir. 2015)(noting that agency action “unhinged from the regulation's plain text” is not entitled to deference). Likewise, deference need not be accorded to the agency's interpretation that “does not reflect the agency's fair and considered judgment on the matter in question, ” Auer, 519 U.S. at 462, such as when the agency's interpretation is “unreasonable, ” Menkes v. U.S. Dep't of Homeland Sec., 637 F.3d 319, 343 (D.C. Cir. 2011), or “ʻwhen it appears that the interpretation is nothing more than a convenient litigating position, or a post hoc rationalization advanced by an agency seeking to defend past agency action against attack, '” Rhea Lana, Inc. v. DOL, 824 F.3d 1023, 1030-1031 (D.C. Cir. 2016)(quoting Christopher, 132 S.Ct. at 2166)).

         Finally, although an agency may amend or repeal its own regulations and is entitled to deference in interpreting ambiguous regulations, “an agency is not free to ignore or violate its regulations while they remain in effect.” Nat'l Envtl. Dev. Ass'ns Clean Air Project v. EPA, 752 F.3d 999, 1009 (D.C. Cir. 2014) (quoting U.S. Lines, Inc. v. Fed. Mar. Comm'n, 584 F.2d 519, 526 n.20 (D.C. Cir. 1978)); see also Steenholdt v. FAA, 314 F.3d 633, 639 (D.C. Cir. 2003) (“Federal agencies must follow their own rules, even gratuitous procedural rules that limit otherwise discretionary actions."). As a result, an agency's action is “arbitrary and capricious if the agency fails to ‘comply with its own regulations.'” Nat'l Envtl. Dev. Ass'ns Clean Air Project v. EPA, 752 F.3d at 1009 (quoting Environmentel, LLC v. FCC, 661 F.3d 80, 85 (D.C. Cir. 2011)).


         The plaintiff argues that NPS's decision to award the contracts to the incumbent concessioners was “directly contrary to explicit law” and that “NPS's own regulations very clearly required NPS to award the two contracts to Eco Tour because [it] had submitted the best proposal.” Pl.'s Mem. at 1. As relief, the plaintiff urges the Court to enter a declaratory judgment that “NPS violated the law, acted arbitrarily and capriciously and abused its discretion in awarding the contracts at issue to” the incumbent concessioners, Compl. at 27 (Prayer For Relief), and to grant injunctive relief by rescinding the contracts as “void as a matter of law, ” and “directing NPS to comply with its obligations . . . and award the contracts at issue to” plaintiff, id. NPS counters that, under applicable regulations, the agency was “lawfully” permitted to “issue the contracts to the incumbent concessioners pursuant to the September 4, 2013 award decision.” Defs.' Mem. Supp. Cross-Mot. Summ. J. & Opp'n Pl.'s Mot. Summ. J (“Defs.' Opp'n”) at 30-31, ECF No. 27-1. NPS further argues that, even if this Court rejects the agency's reading of its own regulations and finds that the final award of the disputed contracts to the incumbent concessioners was arbitrary and capricious, the plaintiff should still be denied equitable relief. The NPS reasons, in a rehash of its unsuccessful motion to dismiss, that the plaintiff has already elected monetary damages as its remedy and, consequently, has no entitlement to injunctive relief. Id. at 16-17, 30-31.

         Analysis of the parties' cross motions for summary judgment begins with the plaintiff's APA challenge to NPS's final award of the disputed contracts, and the NPS's request to reconsider the denial of its prior motion to dismiss. The Court finds, consistent with the holding of the CFC, that NPS violated the APA in awarding the disputed contracts to the incumbent concessioners and, further, that NPS's request for reconsideration is without merit. The plaintiff's entitlement to injunctive relief, however, raises significant issues neither raised nor addressed by the parties about ...

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