IFONE NEDA Internet Serv., Inc. v. Army & Air Force Exch. Serv.

• Decision Date: 25 March 2021
• Docket Number: CIVIL ACTION NO. 4:21-CV-330
• Parties: IFONE NEDA INTERNET SERVICE, INC., et al, Plaintiffs, v. ARMY & AIR FORCE EXCHANGE SERVICE, et al, Defendants.
• Court: U.S. District Court — Southern District of Texas

IFONE NEDA INTERNET SERVICE, INC., et al, Plaintiffs, v. ARMY & AIR FORCE EXCHANGE SERVICE, et al, Defendants.

CIVIL ACTION NO. 4:21-CV-330

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

March 25, 2021

MEMORANDUM AND OPINION

Plaintiffs filed this case on February 1, 2021 and moved for preliminary injunctive relief. (Docs. 1, 19, 21, 27.) On February 26, 2021, this Court held an evidentiary hearing, and on March 1, 2021, this Court held a follow-up hearing. After considering the written briefing, evidence presented, oral arguments, and relevant law, the Court concluded that preliminary injunctive relief should be DENIED. The Court entered an order to that effect on March 1, 2021. (Doc. 32.) The Court writes to further set out the reasons for its denial in light of Plaintiffs' Motion for Reconsideration (Doc. 33.)

I. BACKGROUND

This case arises amidst the United States government's recent decision to decrease its military presence in Afghanistan. (Doc. 25, Exhibit A ¶ 5.) As a result of that decision, the size of the U.S. military base at Kandahar Airfield (KAF), also known as New Camp Brown (NCB), has commensurately shrunk. (Doc. 25, Exhibit D ¶ 3.) The Commander of that base, Lieutenant Colonel Adamcyzk, is responsible for planning for the reduction in the base's physical footprint, including related infrastructural changes. (Doc. 25, Exhibit A ¶ 5.) The Acting Mayor of the base, Jacob Horn, is responsible for coordinating day-to-day operations within KAF and carrying out Commander Adamczyk's policies. (Doc. 25, Exhibit D ¶ 2.)

Plaintiffs IFONE NEDA Internet Service, Inc. and IFONE, Inc. (together, "IFONE") have provided internet services at KAF since at least 2013. (Doc. 21 ¶ 13.) IFONE is one of two contractors that has provided internet services at KAF, the other being DHI Telecom, LLC. (Doc. 25, Exhibit B ¶ 6.) IFONE initially provided services pursuant to an April 12, 2013 agreement with Colonel Mitchell Malone, then-U.S. Commander at KAF, which authorized IFONE to access the base (Doc. 1-2 at 27-34) and a subsequent contract between IFONE and the Army and Air Force Exchange Services (AAFES). (Doc. 25, Exhibit B1.) IFONE additionally has subcontracts with at least 10 other DOD and NATO civilian and military organizations under separate service agreement contracts. (Doc. 15-2 at 6.)

The agreement with AAFES is a "non-exclusive contract to provide Internet Service Provider (ISP) concession operations in Afghanistan." It states that IFONE "will offer internet access to individual living quarters 'in-room', Wi-Fi hotspots, and any locations designated by the Exchange." (Doc. 25-2 at 25.) Its "Termination" clause allows the contract to be terminated by either party immediately upon thirty days written notice. (Doc. 25-2 at 33.) Its "Disputes" clause states: "All disputes arising under or relating to this contract shall be resolved under this clause." (Doc. 25-2 at 35.) Under that clause, a contractor must submit claims to the contracting officer for a written decision, which may be appealed to the Armed Services Board of Contract Appeals (ASBCA). (Id.)

On January 5, 2021, KAF/NCB Command made an initial decision to retain IFONE, not DHI, as the sole internet service provider on base in light of the drawdown. (Doc. 25-2 at 184.) Following discussions on January 21, however, Kristin Mazur (the Camp Mayor at KAF) and Daniel Roney (the Senior Enlisted Leader on NCB) reversed course and decided to retain DHIinstead of IFONE. (Doc. 25-2 at 186-188.) The reasons given were that "[DHI's] towers and equipment are already within the NCB footprint," whereas IFONE had physical infrastructure outside the boundaries of NCB that would be more difficult to move. (Id.)

On January 24, IFONE's co-CEO Joseph Stewart responded to the decision by explaining that IFONE would be able to relocate inside the new perimeter within 30 to 45 days with "minimal to no downtime" of existing services. (Doc. 1-2 at 20.) As IFONE is a "joint venture United States and Afghan company," that relocation process would have involved negotiating land rights outside the new perimeter directly with the Afghan National Army ("ANA") contingent. (Id. at 19.) Roney felt that IFONE's proposal was "not a viable option" for three reasons: (1) the ANA does not actually own the land outside the perimeter where IFONE was stationed, so IFONE lacked a basis to negotiate authorization to stay in that area, (2) as a result, IFONE's workers would be unable to enter NCB for basic necessities such as dining or living, and (3) IFONE would not have a way of obtaining fuel for generators for its Network Operations Center (NOC) that were not tied to force protection outside the perimeter. (Id. at 18.) In subsequent e-mail exchanges, IFONE reiterated that it would need 45 days to engineer and install a new NOC inside NCB, which Roney reiterated would be too long; IFONE subsequently expressed a willingness to meet any "viable timeline" given to it by Camp Command. (Id. at 13-15.) After further back and forth between KAF/NCB Command and IFONE, on January 25, Mazur directed Stewart to seek any further guidance from his "COR" (Contracting Officer Representative). (Id. at 9.)

On January 26, 2021, Contracting Officer James Gordon, in a written letter, told IFONE that the government was terminating its contract with IFONE (including services provisioned through subcontract support) effective February 28, 2021. (Id. at 6.) It directed IFONE to pay all fees to AAFES, return all AAFES-owned property, surrender installation passes to the installationProvost Officer, and provide a draw down plan and exit strategy. (Id.) The stated reason for the decision was that "the location of IFONE's current NOC is outside the new boundaries of KAF/NCB, and because of the probable time difference between those boundaries going up and IFONE's replacement NOC going into operation." (Id. at 8.)

On February 5, Acting Mayor of NCB Jacob Horn informed IFONE that it would be allowed to store its physical infrastructure within the NCB, which led to a misunderstanding. IFONE understood this to reinstate its ISP contract. (Doc. 21 ¶ 24.) However, Horn subsequently clarified that, as he is not a contracting officer, he has no authority to modify contracts and did not mean to do so. (Doc. 25-4 at 3.) In any event, on February 9, 2021, Lieutenant Commander Adamczyk wrote to Contracting Officer Gordon stating that IFONE's services were no longer needed and requesting that IFONE stop all services no later than March 1 and for their demobilization to begin immediately thereafter, including the removal of unutilized equipment and resources before March 13, 2021. (Doc. 25-2 at 214.)

In its Amended Complaint and Motion for a Preliminary Injunction, IFONE seeks relief via two causes of action. First, IFONE alleges that the decision to terminate its AAFES contract and, by extension, its subcontracts, violated its due process rights under the Fifth Amendment as an unlawful de facto debarment. (Doc. 21 ¶¶ 35-37.) Second, IFONE alleges that the decision violates the Administrative Procedure Act (APA). (Doc. 21 ¶¶ 38-45.)

II. JURISDICTION AND JUSTICIABILITY

28 U.S.C. § 1331 grants federal district courts jurisdiction to hear claims challenging agency action under the APA, 5 U.S.C. § 702, including where a plaintiff challenges a military contracting decision. See Blackhawk Indus. Prods. Grp. Unlimited, LLC v. United States Gen. Servs. Admin., 348 F. Supp. 2d 662, 666 (E.D. Va. 2004). After the Court has established itsjurisdiction to hear the case, it must nevertheless additionally decide whether a judicial remedy is available. See, e.g., Adkins v. United States, 68 F.3d 1317, 1322 (Fed. Cir. 1995) ("Even where a court possesses jurisdiction to hear a claim, it may not do so in cases where the claim presents a nonjusticiable controversy—i.e., the claim is such that the court lacks ability to supply relief."). "[J]usticiability is a particularly apt inquiry when one seeks review of military activities." Id. (quoting Murphy v. United States, 993 F.2d 871, 872 (Fed. Cir. 1993)). At the same time, "[n]ot every claim arising from a military decision presents a nonjusticiable controversy." Adkins, 68 F.3d at 1323. For example, even where the "merits of a decision committed wholly to the discretion of the military are not subject to judicial review, a challenge to the particular procedure followed in rendering a military decision may present a justiciable controversy." Id. (emphasis in original) (collecting cases); see also Murphy, 993 F.2d at 872 ("A court may appropriately decide whether the military followed procedures because by their nature the procedures limit the military's discretion); Mindes v. Seaman, 453 F.2d 197, 199 (5th Cir. 1971), rev'd on other grounds on appeal after remand, 501 F.2d 175 (5th Cir. 1974) ("Whether the Post Commander acts arbitrarily or capriciously, without proper justification, is a question which the courts are always open to decide.").

Similarly, the APA exempts from judicial review agency action taken by a "military authority exercised in the field in time of war or in occupied territory." 5 U.S.C. § 701(b)(1)(G). The D.C. Circuit has explained this exception as one applying to "military commands made in combat zones or in preparation for, or in the aftermath of, battle." Doe v. Sullivan, 938 F.2d 1370, 1380 (D.C. Cir. 1991). The court elaborated that the exception would preclude, for example, "judicial interference with the relationship between soldiers and their military superiors." Id. In finding that the exception did not apply, the D.C. Circuit stated that it was "confront[ed with] . . .not a dispute over military strategy or discipline, not one between soldiers and their superiors, but one over the scope of the authority Congress has entrusted to the FDA." Id. In other words, the exception does not apply to all "military matters" generally, but rather to those...