Budike v. Klutznick
| Decision Date | 31 March 1981 |
| Docket Number | Civ. A. No. 80-1790. |
| Citation | 510 F. Supp. 970 |
| Parties | Lothar E. S. BUDIKE, Plaintiff, v. Hon. Philip KLUTZNICK, Secretary of Commerce, and Hon. Samuel B. Nemirow, Asst. Secretary for Maritime Affairs, Defendants, United States Cruises, Inc., Intervenor-Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
David W. Marston, Kirk T. Karaszkiewicz, Philadelphia, Pa., for plaintiff.
James Sheehan, Asst. U. S. Atty., Philadelphia, Pa., for defendants.
William N. Myhre and William R. Meyer, Preston, Thorgrimson, Ellis & Holman, Washington, D. C., for intervenor-defendant.
This is an action to invalidate the sale of the vessel S.S. United States by the Maritime Administration of the Department of Commerce ("MarAd") to the intervenor-defendant, United States Cruises, Inc. ("U.S. C.I."). U.S.C.I. has moved for summary judgment on the ground that plaintiff is without standing to maintain the suit.1
Pursuant to authorization contained in 46 U.S.C. § 1160, MarAd purchased the S.S. United States from its former owner on February 6, 1973.2 Between that date and the date of the vessel's eventual sale to U.S.C.I., MarAd repeatedly solicited bids for the purchase of the ship but was unable to find a suitable buyer.3 On April 18, 1978, MarAd published in the Federal Register Invitation for Bids No. PD-X-1029, setting the minimum price at $5,000,000.00, payable in cash within 30 days of the acceptance of the successful bid. The invitation further specified that each bid was to be accompanied by a deposit in the amount of 10 per cent. In the event that the successful bidder was unable to execute the sales contract within the 30 day period prescribed by the invitation, the 10 per cent deposit was to be surrendered to the government.
In response to PD-X-1029, the plaintiff submitted a sealed bid wherein he offered $3,250,000.00 for the purchase of the vessel and enclosed a check in the amount of $325,000.00 representing the required deposit. U.S.C.I. and five other prospective buyers submitted bids in excess of the $5,000,000.00 minimum purchase price. MarAd rejected each of these bids as unresponsive to the terms of the bid invitation.4 Subsequently, U.S.C.I. and MarAd engaged in negotiations which culminated in the execution of a contract for the sale of the vessel.5
Budike then commenced the instant action6 seeking to invalidate the sale as being in violation of the Federal Property and Administrative Services Act, 40 U.S.C. § 471 et seq. Specifically, he contends that 40 U.S.C. § 484(i), pertaining to the disposal of surplus vessels of 1,500 gross tons or more, incorporates the provisions of the Merchant Marine Act of 1920 which requires "public or private competitive sale after appraisement and due advertisement." 46 U.S.C. § 864. Budike asserts that by privately negotiating with U.S.C.I. and by refusing to permit him to negotiate competitively for the purchase of the vessel, MarAd violated the requirement that such a transaction occur pursuant to "public or private competitive sale."
Following extensive discovery, defendants filed the present motion for summary judgment in which they argue that Budike lacks standing to maintain this action. The basis of defendants' position is that at no time did Budike evince a willingness or ability to meet those terms of the bid invitation which were invariable: a $5,000,000.00 purchase price accompanied by a 10 per cent nonrefundable down payment. It is defendants' contention that as long as Budike was unwilling to meet these terms, the government would not have considered selling him the vessel. Hence, even assuming that MarAd secretly negotiated with U.S.C.I. and excluded Budike from such negotiations, there does not exist a "fairly traceable causal connection between the claimed injury and the challenged conduct", Duke Power Company v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 72, 98 S.Ct. 2620, 2630, 57 L.Ed.2d 595 (1978), and the plaintiff lacks standing. Budike counters this argument in two ways. He asserts first that there is sufficient evidence on the record to raise a genuine issue of fact as to whether he was willing to meet the government's minimum terms for the sale of the ship or whether those terms were immutable as alleged by the defendants. Second, he contends that as a "disappointed bidder" within the meaning of Merriam v. Kunzig, 476 F.2d 1233 (3d Cir.), cert. denied, 414 U.S. 911, 94 S.Ct. 233, 38 L.Ed.2d 149 (1973), and subsequent cases, he possesses standing as a matter of law to challenge MarAd's conduct. For reasons slightly different than those advanced by the parties, I will deny U.S.C.I.'s motion.
It is firmly established that the moving party in a motion for summary judgment must show that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Fed.R. Civ.P. 56(c); Adickes v. S. H. Kress and Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Drexel v. Union Prescription Centers, Inc., 582 F.2d 781, 784 (3d Cir. 1978). Further, all evidence and the inferences drawn therefrom must be considered in a light most favorable to the party opposing the motion. Harold Friedman, Inc. v. Thorofare Markets, Inc., 587 F.2d 127, 131 (3d Cir. 1978) quoting Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962).
Unfortunately, the principles governing the law of standing are neither as concisely summarized or as well settled.7 Standing to challenge action by an administrative agency is governed by section 10 of the Administrative Procedure Act, 5 U.S.C. § 702, which provides that "a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." The essential prerequisite for standing under this provision is a showing that the administrative action has caused the plaintiff "injury in fact, economic or otherwise" to an interest "arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." Association of Data Processing Service Organization v. Camp, 397 U.S. 150, 152-54, 90 S.Ct. 827, 829-30, 25 L.Ed.2d 184 (1970); Americans United for Separation of Church and State, Inc. v. United States Department of Health, Education and Welfare, 619 F.2d 252, 256 (3d Cir. 1980), cert. granted, ___ U.S. ___, 101 S.Ct. 1345, 67 L.Ed.2d 332 (1981). For the purpose of resolving this motion, it is important to observe that in order to have standing, the plaintiff must not only suffer "a distinct and palpable injury" Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975), but must also establish "a fairly traceable causal connection between the claimed injury and the challenged conduct" such that "the exercise of the Court's remedial powers would redress the claimed injury." Duke Power Company v. Carolina Environmental Study Group, Inc., supra, 438 U.S. at 72, 74, 98 S.Ct. at 2630, 2631.
It remains to apply these principles to the facts of this case. In so doing, it is necessary at the outset to isolate the injury claimed by the plaintiff and the remedy which he seeks in bringing this action. Budike alleges that following MarAd's rejection of the bids submitted in response to PD-X-1029, he made repeated attempts to negotiate with agency officials for the purchase of the ship but was arbitrarily precluded from doing so. Complaint ¶¶ 16, 18. He further contends that during this same period of time, MarAd was secretly conducting negotiations with U.S.C.I. Complaint ¶ 17. Thus, the injury which Budike seeks to redress is his allegedly arbitrary and unlawful exclusion from the process of negotiation which ultimately led to the sale of the vessel. He does not ask the court to compel the ship's sale under any specific conditions or terms but only to invalidate the contract entered into between MarAd and U.S.C.I.
In support of their contention that the plaintiff lacks standing under these circumstances, defendants rely heavily upon Public Citizen v. Lockheed Aircraft Corp., 565 F.2d 708 (D.C.Cir.1977), in which a trade association representing dealers of used industrial equipment sought to invalidate the negotiated sale of certain industrial property by the General Services Administration to Lockheed. Acting as a representative of its member firms, the trade association alleged that "as potential purchasers of some of the property which was sold to Lockheed and as potential sellers of used machinery to Lockheed ... its members suffered economic harm as a result of the illegal acts of GSA." Id. at 711. Affirming the district court's dismissal of the complaint, the Court held that this allegation, without more, was insufficient to establish that the plaintiff's member firms had suffered a direct, non-speculative injury as a result of the putatively illegal conduct of the government agency:
...MDNA may challenge the failure to advertise for competitive bidding only upon demonstration that its members presently participate in or contemplate participation in a viable business project which had adequate resources and an existent intent to purchase property such as Plant No. 14 as a whole. No such project or intent was alleged by MDNA in its complaint which claimed only that its members were interested in purchasing "some of the property sold to Lockheed." The depositions of MDNA's officers only raised the possibility that a group of members might organize and, with the possible involvement of unnamed real estate investors, might together have adequate resources to bid competitively for Plant No. 14 as a whole. No details are given. Not even one MDNA member possessing or participating in a group which possessed both adequate assets and an existent intent to bid effectively on Plant No. 14 is identified. T...
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Goldhaber v. Foley
...v. United States, 428 F.2d 1233, 192 Ct.Cl. 773 (1970); Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970); Budike v. Klutznick, 510 F.Supp. 970 (E.D.Pa.1981). 16 The parties have not briefed, and we therefore do not reach at this time, the question whether plaintiffs should have ......
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DONMI OF MILFORD v. US DEPT. OF HOUS. & URB. DEV., Civ. No. N-82-398.
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