F. Alderete General Contractors, Inc. v. U.S.
| Decision Date | 23 August 1983 |
| Docket Number | No. 83-1003,83-1003 |
| Citation | 715 F.2d 1476 |
| Parties | 31 Cont.Cas.Fed. (CCH) P 71,397 F. ALDERETE GENERAL CONTRACTORS, INC., Appellant, v. UNITED STATES, Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
C. Stanley Dees, Washington, D.C., argued for appellant. With him on the brief were David A. Churchill and Jacob B. Pankowski, Washington, D.C., Thomas Spieczny and Raymond C. Caballero, El Paso, Tex., were also on the brief.
Mark A. Cymrot, Washington, D.C., argued for appellee. With him on the brief were J. Paul McGrath, Asst. Atty. Gen., and David M. Cohen, Washington, D.C., Director.
Before MARKEY, Chief Judge, BENNETT, Circuit Judge, and COWEN, Senior Circuit Judge.
The appellant, F. Alderete General Contractors, Inc. (Alderete or contractor), appeals from a decision of the United States Claims Court 1 (Claims Court) which held that it lacked the power under 28 U.S.C. § 1491(a)(3) to grant injunctive and other equitable relief under the circumstances.
The contractor first filed his suit for equitable relief in a district court, which transferred the case to the Claims Court. The contract was awarded after the transfer but before the Claims Court could rule on the merits of the application. Holding that it could not exercise the equitable powers granted by the statute beyond the pre-award stage of the procurement process, the Claims Court dismissed the contractor's complaint. We reverse and remand for further proceedings.
On January 21, 1983, Alderete filed a "Motion for Contempt, Application for Enforcement of Judgment, and for Further Relief" in the United States District Court for the Western District of Texas (District Court) on December 15, 1981. Prior to the filing of the motion, that court had issued a permanent injunction which required that the U.S. Army Corps of Engineers (Corps) offer the Keystone Project in El Paso, Texas, to the Small Business Administration (SBA) under the program established pursuant to Section 8(a) of the Small Business Act, 15 U.S.C. § 637.
Following the issuance of the injunction, the Corps offered the Keystone Project to the SBA, and in June 1982, Alderete was selected for this procurement. The ensuing negotiations between Alderete and the Corps were not successfully concluded and the Corps, after advising SBA, then removed the project from the Section 8(a) program. On January 14, 1983, an unrestricted invitation for bids was issued. Alderete responded with the motion it filed on January 21, 1983, referred to above.
On February 19, 1983, the District Court entered an order holding the Corps in civil contempt for its decision to let the Keystone Project procurement on an unrestricted basis. However, the court also granted the Corps permission to seek relief from the injunction previously entered and to proceed with the bid opening then scheduled, provided that no award would be issued until the court ruled upon an application for relief from the injunction.
By order filed March 9, 1983, the District Court reconsidered its order of February 19, 1983, and ruled that the Corps' decision to relet the contract on an unrestricted basis did not constitute contempt of the injunction which was issued December 15, 1981. The court also ruled that "the Corps may issue an award pursuant to said bid opening." However, the court also found that the events which Alderete had complained of in its motion of January 21, 1983, constituted a "new cause of action and as to that cause of action jurisdiction lies in the United States Claims Court pursuant to 28 U.S.C. 1491." Accordingly, the District Court transferred the case to the Claims Court by order of March 9, 1983.
On the following day, March 10, 1983, the Corps awarded the contract to Burns Construction Company, Inc.
On March 25, 1983, pursuant to the transfer order, Alderete filed in the Claims Court its Complaint And Application For Temporary Restraining Order Preliminary Injunction And Permanent Injunction, seeking equitable relief enjoining construction work, placing the Keystone Project back into the SBA Section 8(a) program and providing for either an award to Alderete or an order that negotiations to this end be reconvened. In the Claims Court, Alderete filed a motion to remand the case back to the District Court, but the Government argued that the Claims Court had jurisdiction to grant injunctive relief despite the award of the contract. Subsequently Alderete took the position that if the case was not remanded to the District Court, the Claims Court should grant the temporary restraining order which had been applied for. The Claims Court treated the Alderete motion for remand as if it were a request in the alternative for a transfer to the District Court or for the issuance of a temporary restraining order.
The Claims Court decided that our recent decision in United States v. John C. Grimberg Co., 702 F.2d 1362 (Fed.Cir.1983) was not directly applicable. However, the court quoted language from that decision which it felt was relevant, and held that its power to grant injunctive relief was limited to the pre-award stage of the contract. In dismissing Alderete's cause, the Claims Court stated that its result would leave Alderete "free to institute whatever post-award action in the District Court it deems to be appropriate, which action will not then be encumbered with the issue of 28 U.S.C. Sec. 1491(a)(3) 'exclusivity' which would be present were this 'pre-award' action (now in the post-award stage) to be transferred to the District Court under 28 U.S.C. Sec. 1631."
Alderete filed a timely appeal and the Government has filed a brief in which it joins Alderete in urging that the Claims Court has power to grant the equitable relief requested. Since the issue of the Claims Court's jurisdiction was fully argued and considered below, it is appropriate for this court to decide the question.
A decision on the issue presented in this appeal requires an interpretation of 28 U.S.C. § 1491(a)(3) 2 and an assessment of the breadth of this court's holding in Grimberg, supra. The case has some unusual aspects.
The suit for equitable relief was first filed in the District Court, which recognized that it lacked jurisdiction, and transferred the case to the Claims Court. One day after the transfer was ordered (before the Claims Court was aware that the case was coming its way), the contracting officer awarded the disputed contract to another contractor.
Appellant and the Government are united in the view that the Claims Court has jurisdiction and both urge reversal.
The Claims Court is divided on the issue. The decision below was followed by Chief Judge Kozinski without discussion in Big Bud Tractors, Inc. v. United States, 2 Cl.Ct. 195 (1983).
In Dean Forwarding Company, Inc. v. United States, 2 Cl.Ct. 559 (1983), Judge Harkins opined that the decision is erroneous. He emphasized that the contract language "brought before the contract is awarded" accords with the standard rule and negates any construction that would have Congress intend the provision to read as though it said "brought and decided before the contract is awarded." In Systems Architects, Inc. v. United States, 2 Cl.Ct. 456, n. 8 (1983), Judge Nettesheim also noted her disagreement with Alderete and stated that since the claim had been filed before the contract was awarded, Grimberg did not mandate a dismissal.
We are aware of the advantage which an appellate court has in resolving an issue where the ground has been well plowed in the conflicting decisions of a lower court. Utilizing this advantage, we are persuaded that Judge Harkins' interpretation of the statute is correct and that the Claims Court has jurisdiction. This conclusion is based in part upon the reasons stated in Judge Harkins' opinion and in part on grounds set forth in the briefs of the parties.
We acknowledge, as we must, that Judge Merow's decision is supported by the dicta from Grimberg quoted in his opinion. 3 However, the issue in Grimberg was whether the Claims Court had power to enter injunctive relief in suits filed after the contract was awarded, and the statements relied on by Judge Merow were entirely unnecessary to decide that question. The court's basic holding was as follows:
1. Jurisdiction
We hold that exercise of the equitable power granted the Claims Court in 28 U.S.C. § 1491(a)(3) (amended 1982) is limited to cases in which complaints are filed in the Claims Court before the involved contracts have been awarded, and the Claims Court therefore lacked jurisdiction to hear and determine the present demand for equitable relief filed after the involved contracts were awarded. 702 F.2d at 1374.
Therefore, the broad dicta quoted by Judge Merow do not mandate the result he reached; the statements should be read in the light of the court's central holding and the controlling fact in that case, namely, that the suit was not brought until after the contract had been awarded.
The transfer statute, 28 U.S.C. § 1631, provides in substance that a transferred case shall proceed as if it had been filed in the court to which it is transferred on the date on which it was actually filed in the court from which it was transferred. The legislative history of this section shows the clear intent of Congress to protect litigants if actions are mistakenly filed in the wrong court. S.Rep. No. 97-275, 97th Cong., 2nd Sess. (1981), U.S.Code Cong. & Admin.News 1981, pp. 11, 21, states in part:
In recent years much confusion has been engendered by provisions of existing law that leave unclear which of two or more federal courts including courts at both the trial and appellate level--have subject matter jurisdiction over certain categories of civil actions. * * * The uncertainty in some statutes regarding which court has review authority creates an unnecessary risk that a litigant may find himself without a remedy because of a...
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