816 F.Supp. 328 (E.D.Pa. 1993), Civ. A. 92-0989, Chem Service, Inc. v. Environmental Monitoring Systems Laboratory-Cincinnati of United States E.P.A.

Docket Nº:Civ. A. 92-0989
Citation:816 F.Supp. 328
Party Name:Chem Service, Inc. v. Environmental Monitoring Systems Laboratory-Cincinnati of United States E.P.A.
Case Date:January 12, 1993
Court:United States District Courts, 3th Circuit, Eastern District of Pennsylvania

Page 328

816 F.Supp. 328 (E.D.Pa. 1993)

CHEM SERVICE, INC., Plaintiff,



NSI Environmental Solutions, Inc., Defendant-Intervenor.

Civ. A. No. 92-0989.

United States District Court, E.D. Pennsylvania.

Jan. 12, 1993

Page 329

F. Michael Friedman, Pagano, Wills & Friedman, Media, PA, for plaintiff.

James G. Sheehan, U.S. Atty's. Office, Karen Elizabeth Rompala, Special Asst., U.S. Atty., Harry A. Short, Jr., Liebert, Short & Hirshland, Philadelphia, PA, James A. Hourihan, Martha R. Moffett, Hogan & Hartson, Washington, DC, for defendants.


JOYNER, District Judge.

Plaintiff, Chem Service, Inc., filed this action seeking declaratory and injunctive relief from portions of several Cooperative Research and Development Agreements entered into between defendants, the Environmental Monitoring Systems Laboratory--Cincinnati of the United States Environmental Protection Agency, Thomas Clark, in his capacity as director of EMSL-CI, and the Environmental Protection Agency and three private organizations. NSI Environmental Solutions, Inc., one of the three private organizations, subsequently intervened as a party defendant. For the purposes of this motion, NSI, the intervening defendant, and the EPA and EMSL-CI will collectively be referred to as the defendants. Plaintiff asserts jurisdiction under the Administrative Procedure Act, 5 U.S.C. §§ 702, 703 and 704 and 28 U.S.C. § 1331.

Presently before the court are the Defendants' motions to dismiss the complaint or, in the alternative, in limine to restrict judicial review to the administrative record. For the reasons which follow, we find that plaintiff lacks standing to bring this action and therefore, plaintiff's claim must be dismissed.

Statement of Facts

In 1986 Congress passed the Federal Technology Transfer Act ("FTTA"). 15 U.S.C. § 3710a et seq. (1991). In short, the purpose of the FTTA is to encourage technology transfer between government scientists and private industry. S.Rep. No. 283, 99th Cong., 2d Sess., (1986) reprinted in 1986 U.S.C.C.A.N. 3442. To effectuate this purpose the FTTA authorizes each federal agency to permit the director of any government-operated federal laboratory to enter into cooperative research and development agreements ("CRADAs") with, among others, private entities. 15 U.S.C. § 3710a(a)(1). A CRADA is defined as:

any agreement between one or more Federal laboratories and one or more non-Federal parties under which the Government, through its laboratories, provides personnel, services, facilities, equipment or other resources with or without reimbursement (but not funds to non-Federal parties) and the non-federal parties provide funds, personnel, services, facilities, equipment, or other resources toward the conduct of specified research or development efforts which are consistent with the missions of the Laboratory ...

15 U.S.C. § 3710a(d). Essentially, a CRADA is a contract under which a private company contributes money and expertise to a federal laboratory to augment its own research in exchange for rights in any resulting inventions.

Page 330

Thomas N. Bulleit, Jr., Public-Private Partnerships in Biomedical Research; Resolving Conflicts of Interest Arising Under the Federal Technology Transfer Act of 1986, 4 J.L. & Health 1 (1989/1990).

In 1991, the Environmental Monitoring Systems Laboratory--Cincinnati ("EMSL-CI") of the Office of Research and Development of the Environmental Protection Agency ("EPA") entered into five CRADAs with industrial organizations pursuant to the FTTA. These CRADAs were designed to continue the efforts of EMSL-CI in distributing reference materials1 to government and private organizations for calibration of analytical instruments. In its amended complaint, plaintiff objects to the CRADAs awarded to NSI Environmental Solutions, Inc. ("NSI"), Ultra Scientific and SPEX Industries.

Prior to 1991, EPA ran several programs for the production and distribution of reference materials. Two of these programs were the Repository for Toxic and Hazardous Materials ("RTHM") and the Pesticides Repository. The RTHM materials were solutions of a single organic compound in a solvent. The Pesticides Repository materials were "neat" materials, that is, an undissolved sample of the material. The materials for both the RTHM and Pesticide Repository were produced under a competitive contract between NSI and EPA from approximately 1984 through 1990.

In its amended complaint plaintiff challenges the CRADAs in a number of ways. First, plaintiff contends that the terms of the CRADA with NSI permit the transfer to and distribution by NSI of RTHM inventory prepared under the competitive contract as well as new samples of the same material as were produced under the competitive contract using the same technology as was previously used. Plaintiff contends that this arrangement is essentially a scheme to market government property and since it does not involve research or development it violates the essential purpose of the FTTA as well as the Advertising Act, 41 U.S.C. § 5, the Government Contracts Act, 41 U.S.C. § 35 et seq., the Competition in Contracting Act, 41 U.S.C. § 251 et seq., the Federal Acquisition Regulations, 48 C.F.R. § 1 and the Federal Property Management Regulations, 41 C.F.R. § 101-45.300 et seq. Further, plaintiff alleges that, in violation of the FTTA which forbids Government funding under a CRADA, 15 U.S.C. § 3710a(d), the defendants have continued to pay NSI under the terms of the competitive contract for stability studies and other maintenance of the RTHM inventory. Plaintiff also alleges that permitting NSI to sell the RTHM inventory which was prepared under the competitive contract was an indirect means of providing government funding, again, in violation of the FTTA. Plaintiff's allegations against the SPEX and Ulta CRADAs are similar, although not identical, to those against NSI. For the purposes of this motion we need not detail the distinctions between the claims against each of the defendants.

For a period of time prior to the granting of the CRADAs, the American Association for Laboratory Accreditation ("A2LA"), a private organization, had been developing specifications for reference standards with the EPA Office of Solid Waste Management and EMSL-CI. Plaintiff received accreditation by A2LA and was thereafter permitted to label its products as "A2LA Certified." Plaintiff contends that in order to obtain and maintain its accreditation by A2LA it was and is required to submit to rigorous testing by independent laboratories, inspections by A2LA and obtain reference testing of all lots of materials produced as "A2LA Certified."

On June 18, 1991 EMSL-CI entered into a Memorandum of Understanding ("MOU") with A2LA in which EMSL-CI and A2LA agreed that the certification programs run by each party to the MOU would contain equivalent technical specifications. These specifications were later finalized in...

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