Jonal Corp. v. District of Columbia

• Decision Date: 21 April 1976
• Docket Number: No. 74-1191,74-1191
• Citation: 533 F.2d 1192,175 U.S. App. D.C. 57
• Parties: JONAL CORPORATION, Appellant, v. DISTRICT OF COLUMBIA.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1192

533 F.2d 1192

175 U.S.App.D.C. 57

JONAL CORPORATION, Appellant, v. DISTRICT OF COLUMBIA.

No. 74-1191.

United States Court of Appeals District of Columbia Circuit.

Argued June 16, 1975.

Decided March 18, 1976.

Rehearing Denied April 21, 1976.

John F. Myers, Washington, D. C., with whom Kahl K. Spriggs, Washington, D. C., was on the brief for appellant.

David P. Sutton, Asst. Corp. Counsel for the District of Columbia, Washington, D. C., with whom C. Francis Murphy, Corp. Counsel, Louis P. Robbins, Principal Asst. Corp. Counsel and Richard W. Barton, Asst. Corp. Counsel, Washington, D. C., were on the brief for appellee.

Before LEVENTHAL and ROBB, Circuit Judges and MERHIGE, ^* United States District Judge for the Eastern District of Virginia.

Opinion for the Court filed by District Judge MERHIGE.

Concurring opinion filed by Circuit Judge ROBB.

Opinion filed by Circuit Judge LEVENTHAL, dissenting in part.

MERHIGE, District Judge:

Appellant, a Maryland corporation doing business in the District of Columbia, takes this appeal from the summary judgment of the District Court holding that decisions of the District of Columbia Contract Appeals Board are subject to the limited scope of judicial review provided in the Wunderlich Act, 41 U.S.C. §§ 321-22 (1970). Jonal sought payment of $71,726.13 allegedly due for work done pursuant to a contract with the District of Columbia to build several water pollution control plant buildings. ¹ Since the amount in controversy exceeds $50,000, jurisdiction was conferred on the District Court by D.C.Code Ann., § 11-501(4) (1973). ²

The facts, as appear in the record, are that following the completion of competitive bidding procedures, the District of Columbia, on April 13, 1967, awarded a contract for the construction of two water pollution control plant supply buildings to the appellant Jonal. The parties entered into a written contract on May 1, 1967 which incorporated by reference all the bid plans and specifications, and all the terms of the bid invitation. Article 15 of the contract contained the following provisions:

Disputes. Except as otherwise specifically provided in this contract, all disputes concerning questions arising under this contract shall be decided by the contracting officer subject to written appeal by the contractor within thirty (30) days to the Contract Appeals Board, whose decision shall be final and conclusive upon the parties thereto, subject to the limitation of Sec. 3(b) (2) of Reorganization Plan No. 5 of 1952. In the meantime the contractor shall diligently proceed with the work as directed.

After the appellant began work in accordance with the contract, disputes arose over the proper interpretation to be given various notes appearing on the contract drawings. Jonal Corporation claimed that it had not contracted to perform specified items of work, ³ but the contracting officer decided to the contra and directed Jonal to proceed with the execution of the contract. Jonal accordingly performed the work under protest, and then submitted claims for compensation to the contracting officer for the alleged additional work. The contracting officer denied the claims and Jonal appealed to the District of Columbia Contract Appeals Board pursuant to the procedure outlined in Article 15 of the contract.

On March 7 and 8, 1972 hearings were held before a three-man panel of the Contract Appeals Board. The members of the Board empanelled to hear the matter were Louis P. Robbins, Assistant Corporation Counsel for the District of Columbia, ⁴ Lou Frana, Assistant Corporation Counsel for the District of Columbia, and Gerald I. Sawyer, a Contracting Officer employed by the District of Columbia Department of Highways. Mr. Robbins and Mr. Frana were appointed by C. Francis Murphy, Chairman of the Contract Appeals Board for the District of Columbia and Corporation Counsel for the District of Columbia. Mr. Sawyer was appointed to the panel by Mr. Robbins. The counsel for the District of Columbia before the Board was James E. Lemert, assigned by Mr. Murphy to both defend the case and prosecute the District of Columbia's case against Jonal for liquidated damages. On February 16, 1973, the Board issued its findings of fact, conclusions of law, opinions and decisions denying appellant's claims.

On April 4, 1973, appellant filed suit, giving rise to this appeal, against the District of Columbia to recover the costs, expenses and damages occasioned by the alleged modifications in the original contract specifications. The District of Columbia answered the complaint on April 27, 1973 and moved for summary judgment on June 19, 1973, contending that disputes arising out of contracts entered into by the District are reviewable under the standards prescribed by the Wunderlich Act, and that the Court's review was restricted to the question of whether decision of the Contract Appeals Board was supported by "substantial evidence." On July 5, 1973, the appellant filed a "Counterstatement of Undisputed Facts" and a statement of "Points and Authorities in Opposition to Defendant's Motion for Summary Judgment." In those papers Jonal contended that the Court must first decide whether Organization Order No. 9, establishing the Board and its constituency violates, on its face, the Due Process Clause of the Fifth Amendment to the Constitution of the United States. In addition, the appellant argues that the Board was so created as to be inherently tainted, allowing the District Court to review de novo the Board's decision. Finally, the appellant noted that it "reserve(d) the right to file supplemental points and authorities in opposition to defendant's arguments on the limitation of (the District) Court's review, and the finality to be accorded the ruling of the Contract Appeals Board, . . . after the issues raised by this pleading are resolved."

On November 27, 1973, the District Court issued its memorandum and order which are the subject of this appeal. The trial judge held that appellant's constitutional claim "must fail for want of jurisdiction since the claim was not properly pleaded as a matter of form." The trial judge also held that the Wunderlich Act's standards of review are applicable to the case and, in accordance with those standards, that the appellee was entitled to summary judgment on the merits. "After a review of the whole administrative record, the Court finds that the District of Columbia Contract Appeals Board's decision was based on substantial evidence, and was not arbitrary or capricious." Op. at 6.

The appellee argues, in support of the District Court's ruling, that the appellant's procedural due process claim was belatedly proffered and improperly pleaded. This position has some justification. The Contract Appeals Board was established in 1953 and its composition, function and authority have remained essentially unchanged since its inception. See Reorganization Order No. 29, pt. VII, D.C.C.E. § 1-App. II 125 (1966), effective September 17, 1953. See also Organization Order No. 9, pt. VI, D.C.Code Ann. § 1-App. 235-36 (1973), effective June 6, 1968; Reorganization Plan No. 3 of 1967 § 303, 3 C.F.R. 345 (Comp.1967), 5 U.S.C.App. § 588 (1970). Yet, Jonal Corporation's constitutional objection to the Board's composition was not presented until after the contract containing the questioned grievance procedure had been knowledgeably executed in 1967 by its representative, ⁵ the administrative procedure had been completely exhausted on the contract issues, the case had been filed and fully pleaded in the District Court, and the defendant had filed a motion for summary judgment. Since the constitutional defect is allegedly inherent in the grievance procedure, the plaintiff, in fairness, ought to have presented its position at an earlier stage of the process. ⁶ We need, however, not reach the issue of whether such a delay in presenting the claim operates to bar this Court from further considering the argument, for we conclude that the appellant's procedural due process contention is lacking in substance.

Jonal Corporation argues that since the Corporation Counsel of the District of Columbia, or his designated representative, appointed all the members of the panel, and since the counsel for the District of Columbia was the Corporation Counsel of the District of Columbia, represented by an assistant Corporation Counsel, who was both defending the District of Columbia against Jonal's claim and prosecuting its claim for liquidated damages against Jonal, it was "being required to try its case before its adversary's lawyer." Br. 17.

In a matter involving a deportation proceeding, the Supreme Court held in Marcello v. Bonds, 349 U.S. 302, 75 S.Ct. 757, 99 L.Ed. 1107 (1955), that due process was not violated by the supervision of adjudicating officers by officials charged with investigating and prosecuting functions.

As noted above, the only complaint which petitioner can urge concerning the hearing procedures in this case is the objection that the special inquiry officer was subject to the supervision and control of officials in the Immigration Service charged with investigative and prosecuting functions. Petitioner would have us hold that the presence of this relationship so strips the hearing of fairness and impartiality as to make the procedure violative of due process. The contention is without substance when considered against the long-standing practice in deportation proceedings, judicially approved in numerous decisions in the federal courts, and against the special considerations applicable to deportation with the Congress may take into account in exercising its particularly broad discretion in immigration matters. 349 U.S. at 311, 75 S.Ct. at 762, 99 L.Ed. at 1116.

The decision has an informative history. Prior to the Marcello case, the Supreme Court had interpreted the Administrative Procedure Act, 5 U.S.C. § 501 et seq., to require the...