Ballerina Pen Company v. Kunzig

Decision Date24 April 1970
Docket NumberNo. 22799.,22799.
Citation433 F.2d 1204
PartiesBALLERINA PEN COMPANY et al., Appellants, v. Robert L. KUNZIG et al.
CourtU.S. Court of Appeals — District of Columbia Circuit

Mr. Jennings Bailey, Jr., Washington, D. C., for appellants.

Mrs. Patricia S. Baptiste, Atty., Dept. of Justice, with whom Messrs. Thomas A. Flannery, U. S. Atty., and Alan S. Rosenthal, Atty., Dept. of Justice, were on the brief, for government appellees. Messrs. David G. Bress, U. S. Atty., at the time the record was filed, Joseph M. Hannon, Gil Zimmerman, and Roger E. Zuckerman, Asst. U. S. Attys., also entered appearances for government appellees.

Mr. Duncan H. Cameron, Washington, D. C., for appellee, National Industries for the Blind.

Before BAZELON, Chief Judge, and TAMM and MacKINNON, Circuit Judges.

TAMM, Circuit Judge:

For the past few years the appellants have supplied the federal government with the ball point pens used assiduously by civil servants from the White House to the neighborhood post office. This commodity has traditionally been procured through the system of bidding generally used to obtain supplies for the government. Use of this system is required by the provisions of law governing public contracts, unless another provision authorizes procurement without advertising.1

One such other provision of law was established by Congress in 1938 through passage of the Wagner-O'Day Act (41 U.S.C. §§ 46-48 (1964)) which creates a Committee on Purchases of Blind-Made Products (hereinafter "Committee"), the duties of which include selecting commodities suitable for inclusion on a Schedule of Blind-Made Products (hereinafter "schedule"); once included on this schedule, the product is no longer subject to procurement through the traditional bid system.

I

The statutory framework is essentially as follows: section 46 establishes the Committee, "to be composed of a private citizen conversant with the problems incident to the employment of the blind" and representatives from various government agencies. (41 U.S.C. § 46 (1964).) Section 47 provides that:

It shall be the duty of the Committee to determine the fair market price of all * * * suitable commodities manufactured by the blind and offered for sale to the Federal Government by any non-profit-making agency for the blind organized under the laws of the United States * * *.

(41 U.S.C. § 47 (1964).) The non-profit agency for the blind which has been set up to serve as the liaison between the Committee and the blind workshops is the National Industries for the Blind (hereinafter "NIB").

Section 48 of the Act then provides that:

All brooms and mops and other suitable commodities hereafter procured in accordance with applicable Federal specifications by or for any Federal department or agency shall be procured from such non-profit-making agencies for the blind in all cases where such articles are available within the period specified at the price determined by the committee to be the fair market price for the article or articles so procured * * *.

(41 U.S.C. § 48 (1964); emphasis added.)

The Committee was given authority to promulgate rules and regulations designed to implement the purposes of the Act. (41 U.S.C. § 47 (1964).) The regulations issued under that authority state specifically that it is the duty of the Committee to determine which commodities are suitable for inclusion on the schedule (41 C.F.R. § 51 — 1.3 (1969)) and to publish the Schedule of Blind-Made Products "listing commodities which must be procured from NIB or workshops." (41 C.F.R. § 51 — 1.4 (1969).) The regulations further designate NIB as the non-profit agency to assist the Committee in the equitable distribution of orders among the workshops and "delegate" to NIB "the responsibility to assist the Committee to assure that the regulations and the intent of the Wagner-O'Day Act are carried out." (41 C.F.R. § 51 — 1.5 (1969).) The respective functions of the Committee and NIB are stated by the appellee NIB to be as follows:

It is the responsibility of the Committee to determine what commodities are suitable for sale by non-profit making agencies for the blind to the Government, to place the commodities on the Schedule and to determine the "fair market price" at which they will be sold to the Government. NIB then distributes orders received from the Government for items on the Schedule among non-profit workshops for the blind for manufacture.

(Brief for Appellee NIB at 2.)

II

On April 16, 1968, the General Services Administration (hereinafter GSA) issued a Letter of Commitment to NIB which guaranteed purchases from it of seventy per cent of the estimated annual requirements for ball point pens and refills for the year February 1, 1969 to January 31, 1970.2 (App. 110-11.) This "letter contract" was ratified by the Award Contract entered into on November 2, 1968. (App. 113-21.)

Appellants, two closely related corporations and three individual employees of the corporate plaintiffs,3 filed suit in the district court on December 20, 1968, alleging, inter alia, that the action of the Committee in adding ball point pens and refills to the schedule was performed arbitrarily, capriciously, and in violation of law; appellants sought a mandatory injunction in the district court to compel withdrawal of the letter of commitment and to require the issuance of invitations for bids. (App. 6-10.) Defendants below filed motions to dismiss, and on February 27, 1969, the district judge dismissed the complaint without opinion or statement of reasons therefor. (App. 191.)

The government defendants' motion to dismiss urged the following grounds for dismissal:

1. Sovereign immunity.
2. Judicial nonreviewability.
3. Lack of standing to sue.
4. Suit barred as to General Services Administration, an Agency of the United States and not a suable jurisdic sic entity under any provision of law.

(App. 149.) At oral argument in this case counsel for the government defendants suggested that "it is our position that this case may be readily disposed of on the threshold issue of standing."4

III

The sole question before us today is whether appellants have standing to challenge the actions of the Committee and the General Services Administration, which they contend are illegal for the following reasons:

1. The Committee has erroneously delegated to NIB the responsibility for determining products appropriate for inclusion on the Schedule of Blind-Made Products.
2. The Committee placed ball point pens and refills on the schedule by a mail vote without any knowledge of the facts by the Committee members, but rather solely on the basis of a recommendation from NIB, thus in effect making the action of the Committee a pro forma rubber-stamping of the NIB action.
3. The effect of placing these commodities on the schedule was a disastrous dislocation of a private manufacturer and its employees in violation of the intent of Congress in passing the Wagner-O\'Day Act.
4. Ball point pens and refills were not "suitable commodities manufactured by the blind" at the time they were placed on the schedule by the Committee. Rather, the action of the Committee and GSA served to set up the blind workshops in the business of producing these commodities.
5. GSA issued its Letter of Commitment prior to the time these commodities were effectively included on the schedule.
6. The commodities involved do not comply with the regulations adopted under the Wagner-O\'Day Act because the value of work done by the blind is less than 15% of the total value of the commodity.

(Brief for Appellants at 3-7.)

The criteria for standing were recently articulated by this court in Scanwell Laboratories, Inc. v. Shaffer, 137 U.S. App.D.C. 371, 424 F.2d 859, No. 22,863 (1970) and by the Supreme Court in Association of Data Processing Serv. Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) and Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970). We interpret these decisions as establishing that a party has standing to challenge the government's award of a contract, even in the absence of specific "person aggrieved" language in the statute under which the contract is let, if a three-part test is satisfied. First, the party must allege that the challenged action has caused him injury in fact, in order to satisfy the Article III requirement that he possess "the personal stake and interest that impart the concrete adverseness" necessary to the existence of a case or controversy. Barlow v. Collins, supra at 164, 90 S.Ct. at 836; cf.Data Processing, supra, 397 U.S. at 150, 90 S.Ct. 827. The plaintiff must further allege that the agency has acted arbitrarily, capriciously, or in excess of its statutory authority, so as to injure an interest that "is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." Id. at 153, 90 S.Ct. at 830; cf. Barlow v. Collins, supra, 397 U.S. at 164, 90 S.Ct. at 836. Finally, there must be no "clear and convincing"5 indication of a legislative intent to withhold judicial review.6 See generallyScanwell Laboratories, supra (137 U.S. App.D.C. at 381, 387, 424 F.2d at 869, 875 n. 10, 19).

It appears that the drafters of section 10 of the Administrative Procedure Act7 deemed it necessary to grant such standing because a rather critical gap existed in the remedies available to one aggrieved by agency action. Logic tells us that Congress lays down the statutory framework within which the various agencies it establishes are to operate with very definite goals in mind — the agencies are designed to function according to the will of Congress; they are not given life, breadth and scope of their own to function as they see fit; rather, they must function as Congress intended them to function. An analysis of the range of that Congressional intent is sometimes a...

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