Fort Sumter Tours, Inc. v. Andrus, 77-8308

• Citation: 564 F.2d 1119
• Decision Date: 03 November 1977
• Docket Number: No. 77-8308,77-8308
• Parties: 24 Cont.Cas.Fed. (CCH) 81,817 FORT SUMTER TOURS, INC., Appellee, v. Cecil D. ANDRUS, Secretary, Department of the Interior, United States, An Agency of the United States of America, and Gray Line Water Tours, Inc., Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1119

564 F.2d 1119

24 Cont.Cas.Fed. (CCH) 81,817

FORT SUMTER TOURS, INC., Appellee, v. Cecil D. ANDRUS, Secretary, Department of the Interior,

United States, An Agency of the United States of America,

and

Gray Line Water Tours, Inc., Appellant.

No. 77-8308.

United States Court of Appeals,

Fourth Circuit.

Argued Oct. 7, 1977.

Decided Nov. 3, 1977.

Coming B. Gibbs, Jr., Charleston, S. C. (A. Hoyt Rowell, III, John M. Bleecker, Jr., Gibbs, Gaillard, Rowell & Tanenbaum, Charleston, S. C., on brief), for appellant Gray Line Water Tours.

Robert B. Wallace and Morris D. Rosen, Charleston, S. C., for appellee.

Larry G. Gutterridge, Dept. of Justice, Washington, D. C., for appellant Andrus.

Before WINTER, Circuit Judge, FIELD, Senior Circuit Judge, and HALL, Circuit Judge.

WINTER, Circuit Judge:

Gray Line Water Tours, Inc. (Gray Line) sought a stay pending appeal of the district court's preliminary injunction preventing the Secretary of the Interior and his designates from entering into any contract to provide boat transportation to and from Fort Sumter National Monument until further order of court. The litigation had been instituted by Fort Sumter Tours, Inc. (Fort Sumter) which sued the Secretary to prevent him from entering into a concession contract in derogation of Fort Sumter's statutory right of preference and to require the Secretary to enter into a contract with Fort Sumter. Gray Line had intervened, and it appeals. The Secretary did not appeal. By agreement of the parties, we decide the appeal and not merely the granting or withholding of a stay pending appeal, and we affirm.

I.

Gray Line is engaged in conducting tours and excursions on the waters of Charleston Harbor. Prior to 1968, it provided boat transportation between Charleston and the Fort Sumter National Monument, an island in the Charleston Harbor under the jurisdiction of the National Park Service (Service), pursuant to a concession contract with Service. Since January 1, 1968, this boat-transportation concession has been held by Fort Sumter. The existing contract between Fort Sumter and Service is due to expire December 31, 1977. On or about July 23, 1976, Service determined to negotiate a new ten-year concession contract, commencing January 1, 1978.

The Secretary, through the National Park Service, is authorized by 16 U.S.C. § 20a to enter into concession contracts with private corporations for the provision and operation of facilities and services necessary to the administration of the National Park System, of which Fort Sumter National Monument is a part. At the heart of the present controversy is 16 U.S.C. § 20d, the text of which is set forth in the margin. ¹ In essence, § 20d grants preferential renewal rights to those existing concessioners who have performed their obligations under prior contracts in a manner satisfactory to the Secretary. It is conceded by all parties to this litigation that Fort Sumter has performed its obligations during the last ten years to the satisfaction of the Secretary and is, therefore, entitled to preferential rights in the negotiation of the new contract. The dispute concerns the meaning and scope of this preferential right and whether, in the particular case, Service gave Fort Sumter the full measure of its statutory right.

The dispute arose in the following manner: On July 23, 1976, the Regional Director of Service was authorized to negotiate a new concession contract for the provision of boat transportation to and from Fort Sumter. Consistent with existing practice, the Regional Director and Fort Sumter negotiated a document referred to as the "Fact Sheet," at once both the bid specifications and Fort Sumter's preliminary working proposal. Pursuant to the requirements of § 20d, Service published notice on December 9, 1976, in the Federal Register, advising the public that Fort Sumter had performed the existing contract in a satisfactory manner, that it was Service's current intention to negotiate a new contract with Fort Sumter, but that it would consider and evaluate any other proposals from interested parties submitted within thirty days. In response to this notice, Gray Line submitted its proposal on January 4, 1977.

On March 1, 1977, the Regional Director informed both parties that Fort Sumter's proposal was clearly superior and that the new concession contract would be negotiated with Fort Sumter. Following informal protests by Gray Line, the Office of Audit and Investigation in the Interior Department reviewed the documentation supporting the Regional Director's decision and concluded, in a report dated May 19, 1977, that the decision to enter into negotiations with Fort Sumter should be rescinded and the process begun anew. ²

On August 9, 1977, the Regional Director advised Fort Sumter of Service's intention to negotiate the new contract with Fort Sumter, conditioned, however, on Fort Sumter's agreeing to modify its proposal to meet certain items in the Gray Line proposal which Service considered clearly superior. ³ By letter dated August 12, the Regional Director further advised Fort Sumter that it had until the close of business on August 26 to make its decision. Fort Sumter was further advised that its failure to accept the additional terms would operate as an automatic waiver of Fort Sumter's preferential negotiating rights and would result in Service's entering into negotiations with Gray Line.

On August 24, 1977, two days before the deadline set by Service, Fort Sumter filed this suit against the Secretary, complaining that Service's conditional offer to negotiate and accompanying ultimatum constituted an arbitrary and capricious denial of Fort Sumter's statutory preferential negotiating rights. On the same day, Fort Sumter advised Service that it was accepting Service's conditional offer to negotiate and would meet the specified additional terms but would do so only if the instant litigation proved unsuccessful. By letter dated September 8, Service construed this conditional acceptance as a rejection and a waiver of preferential negotiating rights.

II.

The district court exercised jurisdiction pursuant to 28 U.S.C. § 1331(a). ⁴ While conceding that this statute grants the federal court general equity jurisdiction in a case brought by an aggrieved person against a federal administrative agency, Gray Line contends that Service's decision to deny Fort Sumter its statutory preference and to negotiate exclusively with Gray Line is not "final agency action" within the meaning of the Administrative Procedure Act § 10(c), 5 U.S.C. § 704, ⁵ and, therefore, is not ripe for judicial review.

While it is generally true that judicial review awaits the issuance of a formal administrative order enforceable against a person or class of persons, such action is not an absolute prerequisite to judicial review. Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); Medical Committee for Human Rights v. Securities and Exchange Commission, 139 U.S.App.D.C. 226, 432 F.2d 659 (1970), vacated as moot, 404 U.S. 403, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972). In Abbott Laboratories, the Supreme Court admonished lower federal courts to take a functional approach in resolving ripeness questions. The goals are: "to prevent the courts . . . from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." 387 U.S. at 148-49, 87 S.Ct. at 1515. To effect these goals, the Court suggested that lower courts consider chiefly two factors in analyzing a ripeness problem: first, "the fitness of the issues for judicial decision . . . ", and second, "the hardship to the parties of withholding court consideration." 387 U.S. at 149, 87 S.Ct. at 1515.

Applying the Abbott Laboratories criteria, we conclude that Service's decision to deny Fort Sumter its statutory preference and to negotiate instead with Gray Line is "final agency action" within the meaning of the Administrative Procedure Act § 10(c).

The issues before the district court are legal in nature ones traditionally within the competence of the judicial branch. That court must decide, as federal courts often must in reviewing administrative action, the precise scope of plaintiff's statutory entitlement and whether such entitlement was improperly denied by the Secretary. As the correspondence of August 9, 12 and September 8 makes clear, both Service's interpretation of the statutory preference and its legal relationship with the plaintiff have become fixed. No further administrative action as regards plaintiff is contemplated unless negotiations break down between Gray Line and Service. As between Fort Sumter and Service, the issues have become sufficiently crystallized to warrant judicial resolution. For all of these reasons, we find nothing to be gained by refraining from exercising jurisdiction at this time.

If, as urged upon us by Gray Line, judicial review is postponed until a concession contract is executed, the delay might prove costly to all concerned. ⁶ If a court were to invalidate a fully executed contract for the reason that, at the outset, a statutory preference was denied negotiation costs would have to be repeated and tourism in the Charleston area might be adversely affected by the disruption in boat transportation between Fort Sumter and the mainland. The better course is to resolve the dispute now by clarifying Fort Sumter's legal rights prior to the execution of the new contract.

We hold, therefore, that the district court acted properly in exercising its general federal equity jurisdiction under 28 U.S.C. § 1331(a).

III.

We turn to the merits of the present appeal. The ultimate merits of the controversy are not before us on appeal and we do not decide them. We decide only whether the grant of interim injunctive...