Nat'l R.R. Passenger Corp.. v. Veolia Transp. Serv. Inc.

• Decision Date: 09 May 2011
• Docket Number: Civil Action No. 1:07–1263 (RBW).
• Citation: 791 F.Supp.2d 33
• Parties: NATIONAL RAILROAD PASSENGER CORPORATION, Plaintiff,v.VEOLIA TRANSPORTATION SERVICES, INC., and Veolia Transportation, Inc., Defendants.
• Court: U.S. District Court — District of Columbia

791 F.Supp.2d 33

NATIONAL RAILROAD PASSENGER CORPORATION, Plaintiff,

v.VEOLIA TRANSPORTATION SERVICES, INC., and Veolia Transportation, Inc., Defendants.

Civil Action No. 1:07–1263 (RBW).

United States District Court, District of Columbia.

May 9, 2011.

Gary A. Orseck, Robbins, Russell, Englert, Orseck & Untereiner, LLP, Washington, DC, for Plaintiff.Kim Hoyt Sperduto, The Sperduto Law Firm, PLC, Washington, DC, for Defendants.

MEMORANDUM OPINION

REGGIE B. WALTON, District Judge.

The plaintiff, National Railroad Passenger Corporation(“Amtrak”), filed this action on July 16, 2007, against Veolia Transportation Services, Inc. and Veolia Transportation, Inc.(collectively “Veolia”), asserting, in Count I, that Veolia aided and abetted the breach by several former Amtrak employees of the fiduciary duties they owed to Amtrak and, in Count II, that Veolia tortiously interfered with Amtrak's prospective economic advantage with regard to a public transportation operation in Southern Florida.See generally Complaint (“Compl.”).Currently before the Court is the plaintiff's motion for partial summary judgment on Count I of its Complaint and the defendants' cross-motion for summary judgment on both Counts I and II of the Complaint.Upon consideration of the parties' submissions and for the reasons set forth below, ¹ both parties' motions for summary judgment must be denied.

I.Background

The factual background giving rise to the allegations in the plaintiff's Complaint was set forth in this Court's earlier opinion denying the defendants' motion to dismiss.SeeNat'l R.R. Passenger Corp. v. Veolia Transp. Servs., Inc.,592 F.Supp.2d 86(D.D.C.2009)(Walton, J.)(“ Amtrak I ”).While that background was drawn solely from the allegations made in the plaintiff's Complaint, the following is based upon facts that are either undisputed or are matters of public record, except where otherwise noted.

Veolia and Amtrak are both “providers of transportation services, including operations services for commuter rail systems.”Compl.¶ 6.Both have “the infrastructure, personnel, and institutional experience necessary to operate major urban commuter rail services.”Plaintiff's Statement of Material Facts Not in Dispute (“Pl.'s Facts”)¶ 6;Defendants' LocalRule 7(h)Counterstatement of Facts in Opposition to Plaintiff's Motion for Partial Summary Judgment(“Defs.'Counter Facts”)§ I ¶ 6.

The controversy in this case arises from the two companies' participation in a competitive bidding process for a contract to provide commuter rail operation service for the South Florida Regional Transportation Authority (the “SFRTA”) for “seven years with one three-year option period.”Compl.¶ 11;Plaintiff's Motion for Partial Summary Judgment on Count I (“Pl.'s Mot.”), Declaration of Gary A. Orseck(“Orseck Decl.”), Exhibit (“Ex.”) 8 (RFPNo. 06–112) at AMTH 003757–3761.²Amtrak alleges that Veolia aided and abetted three former Amtrak employees in breaching their fiduciary duties to Amtrak in connection with Veolia's efforts to acquire the SFRTA contract.Compl.¶¶ 53–59.Amtrak also contends that Veolia interfered with its prospective economic advantage by soliciting the employment of those former Amtrak employees and causing two of them to refuse to be listed as part of Amtrak's management team in its bid to acquire the SFRTA contract.Id.¶¶ 60–66.

A.The Request for Proposals

The SFRTA is a public transit agency that receives public funds and operates the commuter rail service known as the Tri–Rail in Miami–Dade, Broward, and Palm Beach counties in South Florida.Defendants' LocalRule 7(h)Statement of Material Facts as to Which There Is No Genuine Issue to be Litigated in Support of Defendants' Motion for Summary Judgment(“Defs.'Facts”)¶ 1;Plaintiff's Responses to Statements of Material Facts by Defendants Veolia Transportation Services, Inc. and Veolia Transportation, Inc. and Plaintiff's Supplemental Statements of Facts Precluding Summary Judgment (“Pl.'s Supp. Facts”)§ I ¶ 1.In the latter part of 2006, the SFRTA issued a request for bid proposals (“RFP” or “Request for Proposals”), inviting service providers to submit bids to operate and maintain the Tri–Rail commuter system.Defs.' Facts¶ 4;Pl.'s Supp. Facts§ I ¶ 4.Eight companies purchased the SFRTA's Operations Request for Proposal information, Defs.' Counter Facts§ I ¶ 19, and representatives from four of those companies, Herzog Transit Services, Inc.(“Herzog”), Veolia, Amtrak, and the Washington Group International attended a Tri–Rail pre-proposal conference on October 18, 2006, id.;Pl.'s Facts¶ 19.Proposals for the Tri–Rail contract were due on or before January 11, 2007.Compl.¶ 12.According to the RFP, the requirements needed for a successful bid included, inter alia, the composition of a “Key Management Team” that would be responsible for operating and managing the Tri–Rail system.Id.¶ 13.Specifically, “[t]he Operations [Request for Proposals] required that each bidder propose a general manager and an on-site Key Management Team [ ] comprised of members responsible for the following functions: Transportation, Safety, Human Resources/Labor Relations, and Communications (Operations Center).”Defs.' Facts¶ 23;Pl.'s Supp. Facts§ I ¶ 23.“The Operations [Request for Proposals] set forth strict requirements concerning the qualifications of the Key Management Team [M]embers,” which required each team member to “possess a minimum of [three] years of recent experience ... as the operator of a passenger railroad service.”Compl.¶ 14(internal quotation marks omitted).Further, it required that the Key Management Team as a whole “demonstrate relevant experience with the key railroad functions,” including “[t]rain operations in a multiple user environment[;] ... [c]rew management; ... [c]ustomer service[;] ... [r]ailroad employee training and certification; [r]ail operations interface management with maintenance and new construction; [f]inancial management and reporting of rail operations[;] ... [and r]ailroad safety program management.”Id.Amtrak and Veolia were the only two companies that submitted proposals.Defs.' Facts¶ 200;Pl.'s Supp. Facts§ I ¶ 200.

B. Veolia's Proposed Key Management Team On Its Tri–Rail Bid

Veolia began recruiting for its Tri–Rail general manager position in early 2006. Defs.' Facts¶ 36.Recruiting a general manager was “[o]ne of Veolia's first priorities in pursuing the Tri–Rail” contract because the person selected could then “help manage the proposal effort and ... manage the contract if it was awarded to Veolia.”Id.¶ 35.Among the candidates Veolia considered for the position was Joseph Yannuzzi, an Amtrak employee.Id.¶ 38.Several months before the proposal due date, Veolia contacted Mr. Yannuzzi about potentially working for Veolia, but Veolia and Amtrak dispute whether Mr. Yannuzzi was aware that Veolia's potential offer would be contingent on the success of its bid for the Tri–Rail Operations contract.Id.¶¶ 90–92;Pl's Supp. Facts§ I ¶¶ 90–92.³Following Veolia's “entreaty,”⁴ Mr. Yannuzzi informed Gilbert Mallery, Amtrak's Vice President of Strategic Planning and Contract Administration, regarding the contact he had with Veolia.Defs.' Facts¶ 92.

Ultimately, on June 15, 2006, Veolia hired Sidney Birckett for the position of general manager, id.¶ 41, who had been an at-will employee with Amtrak, id.¶ 37.His selection for the position with Veolia was not contingent upon it securing the Tri–Rail Operations contract.Id.¶¶ 37, 41;Pl.'s Facts¶ 31.⁵As general manager, Mr. Birckett worked with Neil Shah, Veolia's Manager of Rail Development, John Kerins, Veolia's Vice President for Rail Development, and Veolia's Human Resources Department to identify and recruit candidates for the other members of Veolia's Key Management Team. Defs.' Facts¶¶ 42, 44;Pl.'s Supp. Facts§ I ¶ 42.

For its Transportation position, Veolia considered James Turngren and Victor Salemme, both Amtrak employees,⁶ as well as Marcus Moore, an independent consultant, and Deborah Wetter, a Veolia employee.Defs.' Facts¶ 45;Pl.'s Supp. Facts§ I ¶ 45.⁷Veolia ultimately extended a contingent offer of employment to Mr. Salemme, who accepted the offer on November 3, 2006.Defs.' Facts¶¶ 45, 56;Pl.'s Supp. Facts§ I ¶ 45, 56.Although, the offer was contingent upon Veolia being awarded the Tri–Rail Operations Contract, Mr. Salemme permitted Veolia to list him and his résumé on its bid.Defs.' Facts¶ 56.At the time of the offer, Mr. Salemme was the Assistant Superintendent for Amtrak's Maine Passenger Service, and he had previously been recognized by Amtrak for his exceptional service.Id.¶¶ 49, 52;Pl.'s Supp. Facts§ I ¶¶ 49, 52.

For its Safety position, Veolia considered Amtrak employees Doug Stencil and Jewel Picket,⁸ along with James Waterman, a Veolia employee.Defs.' Facts¶ 59.Veolia interviewed Mr. Stencil, a Senior Analyst in the Operation Practices Section, id.¶¶ 60, 63;Pl.'s Mot., OrseckDecl., Ex. 33(May 7, 2008 Deposition Transcript of Douglas Stencil)(“Stencil Dep.”)at 44:11–19, who had an exceptional record as an Amtrak employee, seeDefs.' Facts¶ 65(noting that he had “never been disciplined or reprimanded”).On October 31, 2006, Veolia extended Mr. Stencil an offer of employment contingent on it being awarded the Tri–Rail Operations contract, which Mr. Stencil accepted on November 3rd of the same year.Id.¶ 68.Veolia's offer to Mr. Stencil was identical in nature to the offer accepted by Mr. Salemme.Id.¶¶ 56, 68.

For its Communications position, Veolia considered Amtrak employee Gary Mauck, ⁹James Tylick of Veolia,¹⁰ and Mr. Moore, who also had been considered for the Transportation position.Id.¶ 71.Veolia first heard of Mr. Mauck's potential availability from Tom Kirk, an Amtrak Assistant Superintendent in Florida, who said that Mr. Mauck was planning to retire from his position with...