JH Rutter Rex Mfg. Co., Inc. v. United States, Civ. A. No. 80-2865.

CourtUnited States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
Writing for the CourtPhillip A. Wittmann, New Orleans, La., Dennis J. Riley, for defendant-intervenor
Citation534 F. Supp. 331
PartiesJ. H. RUTTER REX MANUFACTURING CO., INC. v. UNITED STATES of America, Harold Brown, Secretary of Defense, Lt. General Gerald J. Post, Director, Defense Logistics Agency, General Emmett Bowers, Commander, Defense Personnel Support Center, Frank L. Coccia, Director, Clothing and Textiles Directorate, Defense Personnel Support Center, Defendants. DeRossi & Son Company, Intervenor.
Docket NumberCiv. A. No. 80-2865.
Decision Date19 February 1982

534 F. Supp. 331

J. H. RUTTER REX MANUFACTURING CO., INC.
v.
UNITED STATES of America, Harold Brown, Secretary of Defense, Lt. General Gerald J. Post, Director, Defense Logistics Agency, General Emmett Bowers, Commander, Defense Personnel Support Center, Frank L. Coccia, Director, Clothing and Textiles Directorate, Defense Personnel Support Center, Defendants.

DeRossi & Son Company, Intervenor.

Civ. A. No. 80-2865.

United States District Court, E. D. Louisiana.

February 19, 1982.


534 F. Supp. 332

Daniel Lund, New Orleans, La., for plaintiff.

Elizabeth A. O'Connell, Asst. U. S. Atty., New Orleans, La., June Rose Carbone, Sandra M. Schraibman, Attys., Dept. of Justice, Washington, D. C., for defendants.

Phillip A. Wittmann, New Orleans, La., Dennis J. Riley, for defendant-intervenor.

CASSIBRY, District Judge:

MOTIONS FOR SUMMARY JUDGMENT

This action is before the court on cross-motions of the parties for summary judgment.1 At issue is the legality of the Department of Defense ("DOD") regulations governing the set-aside of certain military procurement contracts for small business concerns, codified at 32 C.F.R. Part 7. Plaintiff, a manufacturer of military clothing, ineligible for the program because of its size,2 asks the court to declare the program invalid and enjoin its further implementation by the Department of Defense. Plaintiff claims that the program results in the award of more than a "fair proportion" of government contracts to small businesses in the clothing industry, in violation of the due process clause of the Fifth Amendment to the U. S. Constitution, the Administrative Procedures Act, 5 U.S.C. §§ 552(a)(1)(E) (1976) and the "fair proportion" language of the Armed Forces Procurement Act, 10 U.S.C. § 2301 et seq. (1976), and the Small Business Act, 15 U.S.C. § 631 et seq. (1976).

Defendants, the Secretary of Defense, the Director of the Defense Logistics Agency ("DLA"), the Commander of the Defense Personnel Support Center ("DPSC") and the Director of the Clothing and Textiles Directorate of the DPSC, are responsible for clothing procurement for the military services and for uniformed civilian personnel of the Department of Defense ("DOD"). Defendant-intervenor is a qualified small business clothing manufacturer with a direct interest in the continuation of the set-aside program.

Upon careful consideration of the voluminous pleadings and exhibits filed in this action, as well as the argument of counsel, and there being no material fact in issue,

534 F. Supp. 333
the court grants the defendants' and defendant-intervenor's motions for summary judgment

I. BACKGROUND

In 1947, Congress passed the Armed Forces Procurement Act, declaring that: "It is the policy of Congress that a fair proportion of the purchases and contracts under this chapter be placed with small business concerns." 10 U.S.C. § 2301 (1976). That language was extended to a "fair proportion" of total government contracts with the Federal Property and Administrative Services Act of 1949, 41 U.S.C. § 252(b) (1976) and the Small Business Acts of 1953 and 1958, 15 U.S.C. § 644 (1976). The Small Business Act requires that government agencies award procurement contracts to small business concerns when the award is determined

(1) to be in the interest of maintaining or mobilizing the Nation's full productive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Government are placed with small-business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Government property be made to small-business concerns ...3

The Department of Defense adopted small business regulations in 1957 to implement the Armed Forces Procurement Act. Part 7 of the Armed Forces Procurement Regulations4 echoed the "fair proportion" language of the statute:

1-702(a) It is the policy of the Department of Defense to place a fair proportion of its total purchases and contracts for supplies, research and development, and services ... with small business concerns.

To implement this long-standing policy, the regulations provide that the entire amount of a contract shall be set aside for exclusive small business participation if the contracting officer finds certain conditions present. This "set-aside" program operates to aid small business whenever there is a reasonable expectation that at least two responsible small businesses will make offers, and that awards of contracts will be made at reasonable prices. Once a contract has been awarded in the set-aside program, all future requirements by the purchasing office for that particular product or service are subject to a "repetitive set-aside", as long as the same reasonable expectations are present.5 The fact that a large percentage of previous acquisitions of the item has been placed with small businesses, or that

534 F. Supp. 334
small businesses are considered to be already receiving a fair proportion of total contracts, is irrelevant to the decision to set aside a particular contract.6

Plaintiff urges that the program outlined by the above regulations, by requiring repetitive set-asides and by providing that bids from only two small businesses will validate the set-aside of a contract, does not satisfy the statutory mandate for "free and full" competition embodied in the Armed Forces Procurement Act7 and the Small Business Act.8

II. STANDING

Before analyzing plaintiff's claims for declaratory and injunctive relief, defendants' argument that plaintiff lacks standing must be addressed. Defendants' earlier motion to dismiss for lack of standing was denied by minute entry on March 13, 1981. The government defendants and defendant-intervenor urge the court to reconsider its prior ruling in the motions now before the court. Although as a general rule courts should not reconsider issues which have already been decided in an action, Messenger v. Anderson, 225 U.S. 436, 32 S.Ct. 739, 56 L.Ed. 1152 (1912), prior rulings have no res judicata effect and may be reconsidered in light of newly announced legal doctrine. Industrial Workers of the World v. Clark, 385 F.2d 687 (D.C.Cir.1967), cert. denied, 390 U.S. 948, 88 S.Ct. 1036, 19 L.Ed.2d 1138 (1968). See also United States v. Horton, 622 F.2d 144, 148 (5th Cir. 1980); Wm. G. Roe & Company v. Armour & Company, 414 F.2d 862 (5th Cir. 1969). On March 25, 1981, the District of Columbia Court of Appeals issued a thoughtful analysis of the problem of standing in the government procurement arena, Control Data Corporation v. Baldridge, 655 F.2d 283, D.C.Cir., which this court finds instructive. After careful reexamination of the problem of standing under the facts presented by this case, I find again that plaintiff has standing to invoke judicial review of the DOD regulations at issue here.

Under Fifth Circuit jurisprudence, there is a three-part test for standing to contest the validity of agency actions: 1) the challenged action must result in injury in fact to the plaintiff; 2) the interest invaded must be arguably within the zone of interest to be protected by the statute or constitutional guarantee in question; and 3) there must be no statutory prohibition of judicial review. Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. 1979); Baker v. Bell, 630 F.2d 1046, 1050 (5th Cir. 1980).

A. Injury in Fact

Plaintiff's stake in the outcome of this controversy is sufficiently direct and concrete

534 F. Supp. 335
to satisfy the constitutionally-compelled injury in fact requirement for standing. See Flast v. Cohen, 392 U.S. 83, 95, 88 S.Ct. 1942, 1949, 20 L.Ed.2d 947 (1968); Duke Power Co. v. Caroline Environmental Study Group, Inc., 438 U.S. 59, 73, 98 S.Ct. 2620, 2630, 57 L.Ed.2d 595 (1978). Plaintiff alleges that the percentage of DPSC contracts set aside for small business has effectively precluded it from participating in bidding for the type of government procurement contracts for which it successfully bid over the past twenty years or more. Plaintiff claims injury from plant closings and employee lay-offs which allegedly result directly from the implementation of DOD small business regulations and goal practices. Causation of plaintiff's injuries, while not clear-cut, is not "merely speculative". See Warth v. Seldin, 422 U.S. 490, 507, 95 S.Ct. 2197, 2209, 45 L.Ed.2d 343 (1975). Courts have held that an allegation of economic harm to a competition interest was sufficient to satisfy the injury in fact requirement of standing. Marshall and Ilsley Corporation v. Heimann, 652 F.2d 685, 692-93 (7th Cir. 1981). I have no serious doubt that plaintiff's loss of government business was caused at least in part by the government's small business program

In addition, plaintiff meets the constitutional requirement for standing because its claimed injury is "likely to be redressed by a favorable decision." Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 100, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979), citing Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 45, 96 S.Ct. 1917, 1927, 48 L.Ed.2d 450 (1976); Village of Arlington Heights v. Metropolitan Housing Development, 429 U.S. 252, 262, 97 S.Ct. 555, 561, 50 L.Ed.2d 450 (1977). Plaintiff satisfies this court that the competitive harm alleged would be remedied by the requested relief. If this court were to issue declaratory or injunctive relief against the operation of the small business set-aside program where it operated to effectively exclude plaintiff from bidding on any contract, plaintiff's share of DOD contract awards would most likely rise.

Injury in fact has been found in cases involving both "disappointed bidders", who actually bid on a given contract, see, e.g., Kinnett Dairies, Inc. v. Farrow, 580 F.2d 1260 (5th Cir. 1978); Hayes International Corp. v. McLucas, 509 F.2d 247 (5th Cir.), c...

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  • SOUTH FLA. CHAPTER, ETC. v. METROPOLITAN DADE CTY., No. 82-2427-Civ-JWK.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • 16 décembre 1982
    ...your figure for this year, Mr. Stierheim. A. Progress. 41 The county's reliance on J.H. Rutter Rex Manufacturing Co. v. United States, 534 F.Supp. 331 (E.D.La.1982) does not persuade the Court otherwise. The outcome of that case was contingent upon the court's interpretation of regulations ......
  • J.H. Rutter Rex Mfg. Co., Inc. v. U.S., No. 82-3239
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 9 juin 1983
    ...Circuit Judge: This case is an appeal from a summary judgment in the United States District Court for the Eastern District of Louisiana. 534 F.Supp. 331. The plaintiff-appellant, J.H. Rutter Rex Manufacturing Company, Inc., ("Rutter Rex") contends (1) that United States Department of Defens......
  • United States Barite Corp. v. MV HARIS, No. 81 Civ. 1289 (KTD)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 19 février 1982
    ...and the parties to the charter. 2. Forum Non Conveniens The defendant's motion under 28 U.S.C. § 1404 is also denied. A plaintiff's 534 F. Supp. 331 choice of forum is entitled to great weight and will not be disturbed except upon a clear-cut showing by defendant that convenience and justic......
  • Charter Oak Fire Ins. Co. v. Broan-Nutone, L.L.C., No. CIV.A. 303CV733JCH.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • 4 décembre 2003
    ...demonstrated "that convenience and justice for all parties demands that the litigation proceed elsewhere." United States Barite Corp., 534 F.Supp. at 331. This action, therefore is ordered transferred to the Western District of III. CONCLUSION For the foregoing reasons, the defendant's moti......
  • Request a trial to view additional results
5 cases
  • SOUTH FLA. CHAPTER, ETC. v. METROPOLITAN DADE CTY., No. 82-2427-Civ-JWK.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • 16 décembre 1982
    ...your figure for this year, Mr. Stierheim. A. Progress. 41 The county's reliance on J.H. Rutter Rex Manufacturing Co. v. United States, 534 F.Supp. 331 (E.D.La.1982) does not persuade the Court otherwise. The outcome of that case was contingent upon the court's interpretation of regulations ......
  • J.H. Rutter Rex Mfg. Co., Inc. v. U.S., No. 82-3239
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 9 juin 1983
    ...Circuit Judge: This case is an appeal from a summary judgment in the United States District Court for the Eastern District of Louisiana. 534 F.Supp. 331. The plaintiff-appellant, J.H. Rutter Rex Manufacturing Company, Inc., ("Rutter Rex") contends (1) that United States Department of Defens......
  • United States Barite Corp. v. MV HARIS, No. 81 Civ. 1289 (KTD)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 19 février 1982
    ...and the parties to the charter. 2. Forum Non Conveniens The defendant's motion under 28 U.S.C. § 1404 is also denied. A plaintiff's 534 F. Supp. 331 choice of forum is entitled to great weight and will not be disturbed except upon a clear-cut showing by defendant that convenience and justic......
  • Charter Oak Fire Ins. Co. v. Broan-Nutone, L.L.C., No. CIV.A. 303CV733JCH.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • 4 décembre 2003
    ...demonstrated "that convenience and justice for all parties demands that the litigation proceed elsewhere." United States Barite Corp., 534 F.Supp. at 331. This action, therefore is ordered transferred to the Western District of III. CONCLUSION For the foregoing reasons, the defendant's moti......
  • Request a trial to view additional results

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