COLEMAN AMERICAN MOVING SERVICES v. Weinberger, Civ. A. No. 86-T-1016-S.

• Court: United States District Courts. 11th Circuit. Middle District of Alabama
• Citation: 716 F. Supp. 1405
• Docket Number: Civ. A. No. 86-T-1016-S.
• Parties: COLEMAN AMERICAN MOVING SERVICES, INC., an Alabama corporation; Admiral Van & Storage Company, Inc., an Alabama corporation; Consolidated Van & Storage Company, Inc., an Alabama corporation; Acme Moving & Storage Company, Inc., an Alabama corporation; Alabama Moving & Storage Company, Inc., an Alabama corporation; Thompson Moving & Storage Company, Inc., an Alabama corporation; Shelly Loftin, d/b/a ABC Moving & Storage Company, a sole proprietorship; Hickman Moving & Storage, an Alabama corporation; and Patrick B. Coleman, Plaintiffs, v. Casper WEINBERGER, Secretary of the United States Department of Defense; John O. Marsh, Jr., Secretary of the United States Department of the Army; Major General Edward Honor, Commander, United States Army Military Traffic Management Command, Room 702, 5611 Columbia Pike Falls Church, Virginia XXXXX-XXXX; and the United States of America, Defendants.
• Decision Date: 15 February 1989

716 F. Supp. 1405

COLEMAN AMERICAN MOVING SERVICES, INC., an Alabama corporation; Admiral Van & Storage Company, Inc., an Alabama corporation; Consolidated Van & Storage Company, Inc., an Alabama corporation; Acme Moving & Storage Company, Inc., an Alabama corporation; Alabama Moving & Storage Company, Inc., an Alabama corporation; Thompson Moving & Storage Company, Inc., an Alabama corporation; Shelly Loftin, d/b/a ABC Moving & Storage Company, a sole proprietorship; Hickman Moving & Storage, an Alabama corporation; and Patrick B. Coleman, Plaintiffs,
v.
Casper WEINBERGER, Secretary of the United States Department of Defense; John O. Marsh, Jr., Secretary of the United States Department of the Army; Major General Edward Honor, Commander, United States Army Military Traffic Management Command, Room 702, 5611 Columbia Pike Falls Church, Virginia XXXXX-XXXX; and the United States of America, Defendants.

Civ. A. No. 86-T-1016-S.

United States District Court, M.D. Alabama, S.D.

February 15, 1989.

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COPYRIGHT MATERIAL OMITTED

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James R. Wyrsch, Koenigsdorf, Kusnetzky & Wyrsch, Bernard C. Craig, Jr., Levy & Craig, Kansas City, Mo., and David B. Byrne, Jr., Robison & Belser, Montgomery, Ala., for plaintiffs

John C. Bell, U.S. Atty., and Kenneth E. Vines, Asst. U.S. Atty., Montgomery, Ala., for defendants.

MEMORANDUM OPINION

MYRON H. THOMPSON, District Judge.

The plaintiffs in this lawsuit challenge, first, their past, temporary suspensions from eligibility to bid on moving and storage contracts with agencies of the federal government, and, second, the refusal of the federal government to award them "makeup tonnage" following the termination of their suspensions. The plaintiffs are Patrick B. Coleman, Coleman American Moving Services, Inc., Admiral Van & Storage Company, Inc., Consolidated Van & Storage Company, Inc., Acme Moving & Storage Company, Inc., Alabama Moving and Storage Company, Inc., Thompson Moving & Storage Company, Inc., ABC Moving & Storage Company and Hickman Moving & Storage. The defendants are the United States of America and various government officers who imposed and enforced the suspensions in question and who determined that the plaintiffs should not be awarded make-up tonnage.

This cause is now before the court on a motion to dismiss or in the alternative motion for summary judgment, filed by defendants. For reasons that follow, the court concludes that the defendants' motion for summary judgment should be granted.

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I. BACKGROUND

A. The Suspensions

This case is the fifth in a line of cases brought by the plaintiffs challenging the federal government's actions leading up to and following their suspensions. In the first four cases, consolidated under the style Coleman American Moving Services, Inc. v. Marsh, civil action nos. 86-T-327-S, 86-T-328-S, 86-T-329-S, and 86-T-365-N (M.D.Ala. April 25, 1986), this court refused to enjoin the government's suspension of the plaintiffs. In its 1986 order, this court related the facts leading up to the suspensions to be, for the most part, as follows.

i.

Each of the plaintiffs derives substantial revenue from contracts awarded by the Army's transportation office at Fort Rucker, a military installation in Alabama. These contracts provide for long-term storage, interstate transportation, and overseas shipment of household goods for military personnel. When soldiers at Fort Rucker receive orders transferring them either to another military installation in the United States or to an installation abroad, they report to the fort's transportation office. If the transfers are temporary, the transportation office contracts for short-term storage of the soldiers' household goods. If the transfers are expected to span a number of months or years, the transportation office contracts either for long-term storage of the soldiers' household goods in the Fort Rucker vicinity or for shipment of the soldiers' effects to their new posts.

To provide the services described above, the plaintiff companies engage in two different types of activities. First, the companies act as prime contractors, entering into multiple contracts directly with the Army for long-term storage of soldiers' household goods. These contracts, known as "non-temporary storage" contracts, are awarded pursuant to a complex bidding process, the essence of which is as follows. At certain intervals during the year, the companies submit separate lists of particular services that, in essence, constitute standing bids to render those services at a set price during a fixed period of time. While these bids are called "basic ordering agreements," they are actually executory and nonbinding. They do not bind the government until a particular bid is accepted. Each company submits its list of bids, or "basic ordering agreement," to the Army's regional office of military traffic management command in Atlanta, Georgia. The bids are reviewed by the Atlanta office and transmitted to Fort Rucker's transportation office. When a soldier needs long-term storage, the fort's transportation office consults the approved bid lists and awards the storage contract to whichever company has submitted the lowest bid for that service. At that time, and at that time only, does an actual contract come into being.

In the second type of activity, known as "line haul" agreements, the plaintiff companies act as agents for large interstate van lines engaged in long distance hauling to and from Fort Rucker. Under applicable Army regulations, each van line must work in conjunction with a qualified local agent or mover who coordinates all local aspects of the long distance move. Failure to secure a local agent renders the van line ineligible for Army contracts. The interstate van line submits bids for long distance hauling to the Army's regional office in Atlanta. Once those bids are reviewed, they are forwarded to the transportation office at Fort Rucker. When the need for long distance hauling arises, the transportation office awards contracts to van lines based on their past performance and cost. The interstate carrier selected for each job actually hauls household goods to a soldier's next post, while the company serving as that van line's qualified agent coordinates all local aspects of the shipment. Such agents are compensated for their essential role in the line haul process and for the work they do to facilitate moves on the local level.

ii.

Federal acquisition regulations limit the solicitation and award of government contracts to "responsible contractors only." 48 C.F.R. § 9.402(a). Before bids may be

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awarded by the government, contractors must make an affirmative showing of such responsibility. § 9.103(b). Moreover, the government may temporarily suspend a contractor from future dealings whenever the following are present: first, it determines that "immediate action is necessary to protect the Government's interest," and, second, it obtains "adequate evidence" of, among other offenses, "a violation of the antitrust laws" by the contractor. § 9.407-2(a). "Adequate evidence" for purposes of the regulations is automatically provided by an indictment for a listed offense. § 9.407-2(b).¹

Therefore, when an indictment for a listed crime has been returned by a grand jury, the agency has adequate evidence to suspend immediately the contractor "pending the completion of legal proceedings." § 9.407-1(b). However, the agency must promptly notify the contractor of such suspension. § 9.407-3(c). The contractor then has a right, upon request within 30 days of the notification, to present "matters in opposition" to the suspension. §§ 9.406-3(c), 9.407-3(c). This procedure is non-adversarial in nature unless a disputed issue of fact as to the existence of the indictment is raised. Under Army regulations, the opportunity to present matters in opposition must be afforded within 10 days of a timely request by the contractor for such an opportunity. The suspending official at the agency then has broad discretion to lift the suspension. §§ 9.406-4(c)(5), 9.407-3(d)(3). The suspending official's decision whether to lift the suspension then becomes a final agency action appealable to the courts under the Administrative Procedure Act, 5 U.S.C.A. §§ 701-706.

iii.

Attorneys for the Department of Justice's Antitrust Division began investigating possible anticompetitive behavior by some of the plaintiffs in connection with their moving and storage business with the government some time prior to February 18, 1986. On that date, they invited counsel for the companies to meet with them in Washington, D.C. The purpose of the meeting was to afford the companies an opportunity to present any reasons why the government should not seek their criminal indictment for antitrust violations. At the conclusion of that meeting, the government attorneys informed the companies' counsel that indictments for antitrust violations would be sought and that an indictment would probably be returned. At that meeting, the government attorneys also explained that under federal acquisition regulations such an indictment would automatically result in suspension of the companies' contracting privileges with any executive agency of the government, unless that suspension was lifted by a competent authority, and that a conviction in the criminal trial would lead to disbarment of their civil contracting privileges.

On March 6, 1986, an antitrust indictment was returned against Coleman America and its president, ACME and its president, Hickman Moving and its president, and Thompson Company. It charged them with conspiring to eliminate competitive rates (1) on line haul shipments from Fort Rucker and (2) for long-term storage services in the Fort Rucker vicinity, in violation of the Sherman Act, 15 U.S.C.A. § 1.

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iv.

On March 10, 1986, the indictment was forwarded to the Department of...