Baltimore Gas and Elec. Co. v. U.S.

• Decision Date: 12 March 2001
• Docket Number: No. CIV. AMD 00-2599.,CIV. AMD 00-2599.
• Citation: 133 F.Supp.2d 721
• Parties: BALTIMORE GAS AND ELECTRIC COMPANY, Plaintiff, and Maryland Public Service Commission and Maryland Office of People's Counsel, Plaintiff-Intervenors, v. UNITED STATES of America and Louis Caldera, Secretary of the Army, Defendants, and Enron Federal Solutions, Inc., Defendant-Intervenor.
• Court: U.S. District Court — District of Maryland

133 F.Supp.2d 721

BALTIMORE GAS AND ELECTRIC COMPANY, Plaintiff and Maryland Public Service Commission and Maryland Office of People's Counsel, Plaintiff-Intervenors, v. UNITED STATES of America and Louis Caldera, Secretary of the Army, Defendants and Enron Federal Solutions, Inc., Defendant-Intervenor.

No. CIV. AMD 00-2599.

United States District Court, D. Maryland.

March 12, 2001.

COPYRIGHT MATERIAL OMITTED

Kevin P. Mullen, Piper, Marbury, Rudnick & Wolfe, Washington, DC, for Baltimore Gas & Electric Company.

Susan Stevens Miller, The Maryland Public Service Commission, Baltimore, MD, for The Maryland Public Service Commission.

Michael J. Travieso, Theresa V. Czarski, Maryland Office of People's Counsel, Baltimore, MD, for Maryland Office of People's Counsel.

Lynne A. Battaglia, U.S. Attorney, Larry D. Adams, Assistant U.S. Attorney, Douglas W. Kornreich, Assistant District Counsel, U.S. Army Corps of Engineers, Office of Counsel, Baltimore District, Baltimore, MD, for The United States of America, Louis Caldera, Secretary of the Army.

James L. Shea, Mitchell Y. Mirviss, Maria E. Rodriguez, Venable, Baetjer & Howard, Baltimore, MD, for Enron Federal Solutions, Inc.

MEMORANDUM

DAVIS, District Judge.

Congress determined, in its considered judgment, that the military services should transfer ownership of their utility systems to private interests. As is not infrequently the case, travel is tortuous over Congress' legislative pathways to the intended destination. This case presents a challenge to a solicitation for bids to privatize the utility distribution systems owned by the United States Army at Fort George G. Meade, Maryland.

I. INTRODUCTION

Plaintiff, Baltimore Gas and Electric Company ("BG & E"), is a regulatee of intervenor the Maryland Public Service Commission ("the PSC")(together hereinafter, "plaintiffs"). Plaintiffs maintain this action pursuant to the Administrative Dispute Resolution Act of 1996, Pub.L. No. 104-320, § 12, 110 Stat. 3870, 3874-76 (1996), codified in part at 28 U.S.C. § 1491(b) ("ADRA").¹ They contend that the Department of Defense acted illegally when it issued the bid solicitation referred to by the parties as RFP No. DACA31-00-R-0026 ("the Solicitation")² because: (1) the Solicitation does not specify that the PSC will have jurisdiction over the successful bidder that becomes the new owner of the Fort Meade utility distribution system, and (2) the Solicitation does not require that a bidder hold franchise rights and a utility license issued by the PSC. Plaintiffs seek declaratory and injunctive relief prohibiting any contract award under the Solicitation that fails to embody the two above requirements.

The defendants are the United States and the Secretary of the Army (hereinafter together "the Army") and intervenor Enron Federal Solutions, Inc. ("Enron"), a competitor of BG & E in the utility industry, but a firm which is not a regulatee or licensee of the PSC. Defendants contend that the Army has acted reasonably to reconcile the conflicting statutory and regulatory provisions inherent in the regime created by Congress as a part of its command to privatize utility systems at military installations.³ Now pending are cross-motions for summary judgment.⁴ The issues have been fully briefed and counsel have been heard in oral argument. For the reasons explained below, I shall grant summary judgment to the defendants and enter an appropriate declaratory judgment allowing the Army to proceed.

II. PRELIMINARY ISSUES

Initially, I shall consider several threshold questions, some of which I raised sua sponte at oral argument, and as to which the parties have filed supplemental memoranda: (1) whether the court has Article III jurisdiction over this dispute, and specifically, whether the parties have standing to challenge the Solicitation and whether the dispute is ripe for decision; (2) whether BG & E's complaint is timely; and (3) whether, as BG & E argues, I should stay this matter until the Army has concluded its negotiations with the interested parties and has awarded a contract pursuant to the Solicitation (on the ground that, if BG & E is awarded the contract to purchase the Fort Meade utility distribution system, its claims, as well as those of the PSC, will be moot).

A. Article III Jurisdiction

This court's power is limited by the boundaries defined in Article III of the United States Constitution. While Congress can enact laws authorizing district courts to exercise more or less of the broader grant of Article III jurisdiction, it cannot confer power upon this court to act outside of its Article III powers. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 491, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983)("This Court's cases firmly establish that Congress may not expand the jurisdiction of the federal courts beyond the bounds established by the Constitution."). Thus, while ADRA purports to authorize this court to "render judgment on an action ... objecting to a solicitation ... for bids," see supra n. 1, I must first address whether the current dispute satisfies the requirements of Article III.⁵

1. Standing

Clearly, this is a case arising under "the Laws of the United States," U.S. Const. Art. III, Sec. 2, that is, ADRA. 28 U.S.C. § 1491(b)(1). Additionally, however, Article III requires a "case or controversy," having as its "irreducible constitutional minimum" the requirement of standing.⁶ Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). The Fourth Circuit applied Supreme Court standing principles in Burke v. City of Charleston, 139 F.3d 401, 405 (4th Cir. 1998), stating that:

[S]tanding requires: (1) that the plaintiff personally has suffered actual or threatened injury that is concrete and particularized, not conjectural or hypothetical; (2) that the injury fairly can be traced to the challenged action; and (3) that the injury is likely to be redressed by a favorable decision from the court.

Viewing BG & E's allegations in the light most favorable to BG & E, these criteria are satisfied. As to the first prong of the test for standing, a bidder's right to a legally valid procurement process constitutes a cognizable injury sufficient to confer standing to seek "forward looking [declaratory and injunctive] relief," Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 210, 115 S.Ct. 2097, 132 L.Ed.2d 158 (1995). A bidder is not required to allege that it has actually lost a contract award. See Scheduled Airlines Traffic Offices, Inc. v. Department of Defense, 87 F.3d 1356, 1358-59 (D.C.Cir.1996); Winstar Communications, Inc. v. United States, 41 Fed.Cl. 748, 756 (Fed.Cl.1998).

BG & E alleges that it will be deprived of a competitive advantage to which it is lawfully entitled if this court declines to compel the Army "to cancel or amend the solicitation in accordance with federal statutes, regulations and directives." Complaint ¶¶ 67, 76, 79. The gravamen of BG & E's claim is that the law compels the Army to require "the contract awardee to possess the requisite service territory and franchise rights under Maryland law to own, operate and maintain Fort Meade's electric and gas distribution systems." Complaint ¶ 66. Were such restrictions to be added to the Solicitation, BG & E would enjoy a competitive advantage because it is the only entity to possess such territory and franchise rights. Whether another entity would be able to secure such rights in time to submit a successful bid (or to perform pursuant to a successful bid) is, at best, an open question. Thus, BG & E alleges that the Solicitation denies it a competitive advantage because it fails to comply with federal law. This alleged injury is "actual or imminent, not conjectural or hypothetical." Adarand, 515 U.S. at 211, 115 S.Ct. 2097. It thus satisfies the first prong of the test for standing.

The second requirement of standing, that "the injury fairly can be traced to the challenged action," Burke, 139 F.3d at 405, is clearly satisfied. The challenged action is the Army's wording of the Solicitation (grounded in its construction of the underlying statutory provisions), which BG & E alleges deprives it of a competitive advantage to which it is legally entitled. Thus, the injury, the denial of competitive advantage, is caused directly by the challenged action.

Similarly, the third requirement for standing, "that the injury is likely to be redressed by a favorable decision from the court," id., is satisfied. Were this court to grant BG & E the relief it requests, it would prohibit the Army from proceeding with any potential transaction pursuant to the Solicitation or, perhaps, order the Army to amend the Solicitation to require that any "contract awardee ... possess the requisite service territory and franchise rights under Maryland law to own, operate and maintain Fort Meade's electric and gas distribution systems." If the Solicitation were modified, BG & E would regain its competitive advantage. Thus, I am satisfied that BG & E has Article III standing to bring this suit.⁷

The same is not true for plaintiff intervenor Office of People's Counsel. The Office of People's Counsel alleges only that it fears that utility rates for residential consumers will increase, and safety will decrease, if a nonregulated utility wins the privatization contract for the Fort Meade distribution systems. This interest is entirely too speculative to satisfy the injury-in-fact requirement for Article III standing. See Burke, 139 F.3d at 406-07. First, it assumes that a nonregulated entity will win the competitive bid (which might not happen). Then, it assumes that that entity will not comply with state law and regulations concerning safety and adequacy of utilities delivery. The Solicitation states explicitly that the contract awardee must comply with all state and local health, safety and environmental laws, including utilities laws and regulations. Thus, the Office of People's Counsel's...