Public Citizen v. Lockheed Aircraft Corp.

• Decision Date: 25 August 1977
• Docket Number: No. 75-1958,75-1958
• Parties: , 24 Cont.Cas.Fed. (CCH) 81,656 PUBLIC CITIZEN et al., and Machinery Dealers National Association, Appellant, v. LOCKHEED AIRCRAFT CORPORATION et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 708

565 F.2d 708

184 U.S.App.D.C. 133, 24 Cont.Cas.Fed. (CCH) 81,656

PUBLIC CITIZEN et al., and Machinery Dealers National Association, Appellant, v. LOCKHEED AIRCRAFT CORPORATION et al.

No. 75-1958.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 22, 1976.

Decided Aug. 25, 1977.

Larry P. Ellsworth, Washington, D. C., with whom Alan B. Morrison, Washington, D. C., was on the brief, for appellant.

Kenneth C. Bass, III, Washington, D. C., with whom Fred M. Vinson, Jr., Washington, D. C., was on the brief, for appellee, Lockheed Aircraft Corp.

Robert L. Klarquist, Atty., Dept. of Justice, Washington, D. C., with whom Peter R. Taft, Asst. Atty. Gen., Jacques B. Gelin and Herbert Pittle, Attys., Dept. of Justice, Washington, D. C., were on the brief, for appellee, General Services Administration.

Before DANAHER, Senior Circuit Judge, and TAMM and ROBINSON, Circuit Judges.

Opinion for the court filed by Circuit Judge TAMM.

TAMM, Circuit Judge:

The present appeal requires this court to delve once more into the ever-increasing underbrush of legal precedents applying the doctrine of standing to challenge administrative acts by a federal agency. The appellant, Machinery Dealers National Association (MDNA), is a trade association representing approximately 350 members who buy and sell used industrial machinery. Along with a senator and three congressmen, ¹ MDNA sought declaratory and injunctive relief invalidating a negotiated sale by the General Services Administration (GSA) of real and personal property of the federal government ² to Lockheed Corporation Upon Lockheed's motion, which was joined by GSA, the district court dismissed the plaintiffs' complaint. ⁵ The district court determined that MDNA lacked standing because the interests of its members affected by the sale are not arguably within the zone of interests protected by the Act. Although we rest our conclusion on a different basis, we agree that MDNA has not demonstrated that it has standing to seek judicial review of GSA's sale of Plant No. 14 to Lockheed, and therefore affirm the judgment of the district court.

                on the grounds that the sale violated the Federal Property and Administrative Services Act (the Act), 40 U.S.C. § 471 et seq.  (1970). 3  MDNA does not seek relief for injuries to any institutional interest, but claims only to represent its member-firms which "(a)s potential purchasers of some of the property which was sold to Lockheed and as potential sellers of used machinery to Lockheed . . .  suffered economic harm as a result of the illegal acts of GSA . . . ." 4
                

I. BACKGROUND

A. The Statutory Scheme

Any sale of government property to a private party must comply with the provisions of the Federal Property and Administrative Services Act. Under the Act, property subject to the control of a federal agency which is not required for the discharge of the agency's responsibilities may be declared "excess". ⁶ GSA then determines whether any other federal agency With certain exceptions, disposals must be accomplished through publicly advertised, competitive bidding. ¹⁰ The advertisement for bids, where required, must be under terms and conditions which "shall permit that full and free competition which is consistent with the value and nature of the property involved," ¹¹ and GSA must accept that bid which is "most advantageous to the Government, price and other factors considered." ¹²

can use the property and, if not, declares the property "surplus". ⁷ The Act permits GSA or an agency authorized by GSA to dispose of surplus property by sale or other method of transfer "upon such . . . terms and conditions as the Administrator (of GSA) deems proper." ⁸ The disposing agency must, however, first seek the advice of the Department of Justice as to whether the contemplated disposal would be inconsistent with federal antitrust laws. ⁹

B. Course of Negotiation, Declaration of Excess, and Effectuation of Sale

Prior to 1968, the government-owned portions of Plant No. 14 were dedicated to the use of and under the control of the Department of Defense (DOD). In that year, ¹³ DOD entered into negotiations with Lockheed concerning the sale of the plant. Following the initiation of these negotiations, DOD declared Plant No. 14 excess to its needs and responsibilities on two conditions: (1) that the property be sold only to Lockheed, and (2) that Lockheed be required to maintain the plant's defense production capacity for a period of at least five years. ¹⁴ Thereafter, the property was transferred to GSA for disposition. Operating on the assumption that no other agency would be interested in obtaining property which DOD would allow to be transferred only to Lockheed and only on the condition that the defense production capacity of the property be maintained for a five year period, ¹⁵ GSA declared the property "surplus" without offering it to any other agency. After further negotiations and without advertising publicly for competitive bids, GSA agreed to sell Plant No. 14 to Lockheed. ¹⁶ GSA, however, reserved the right to rescind the sale agreement should the Attorney General advise that the sale would be inconsistent with the antitrust laws.

The proposed terms and conditions of the sale were then submitted to the Department of Justice. Throughout a series of correspondence with GSA, the Attorney General's office maintained that the proposed sale in fact was inconsistent with the antitrust laws. ¹⁷ Nevertheless, GSA informed Lockheed that it would agree unconditionally to the sale, and the title to the property subsequently was conveyed on May 30, 1973.

C. Allegations of Illegality and Claim to Relief

MDNA claims that the negotiation and sale of Plant No. 14 to Lockheed violated two provisions of the Act and also constituted arbitrary and capricious action on the part of GSA. First, MDNA contends that DOD could not properly declare Plant No. 14 surplus because the condition requiring Lockheed to maintain the plant's defense production capacity for five years demonstrates that DOD had a continuing need for the plant. ¹⁸ Second, MDNA claims that the failure to advertise publicly for competitive bids was unlawful. ¹⁹ Third, MDNA argues that GSA acted arbitrarily and capriciously because it ignored the advice of the Attorney General's office that the proposed sale would be inconsistent with the antitrust laws and based the sale price on an outdated appraisal. ²⁰

On the basis of these arguments MDNA seeks a judicial declaration that GSA's attempted sale to Lockheed was unlawful and of no force or effect and an order requiring GSA to "take immediate steps to exercise full right, title, interest and control over said Property." ²¹ It is important to note that MDNA seeks only to effectuate a rescission of the sale and does not seek to have the court require a subsequent sale on any specified terms.

II. INJURY IN FACT

Under the "case or controversy" requirement of Article III of the Constitution, a claim is justiciable in the federal courts only if the claimant has " 'such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975) (emphasis in original). Yet in the view we take of this case we do not reach the question whether the injury here alleged meets the "irreducible Art. III case-or-controversy requirements for standing," United States v. Richardson, 418 U.S. 166, 180-81, 94 S.Ct. 2940, 2949, 41 L.Ed.2d 678 (1974) (Powell, J., concurring), because we are governed by the Administrative Procedure Act, 5 U.S.C. § 702 (1970), which grants standing to challenge administrative action to any " person suffering legal wrong . . . or adversely affected or aggrieved" by it. See United States v. Students Challenging Regulatory Agency Procedure (SCRAP),412 U.S. 669, 687-90 & n.14, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973); Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App.D.C. 371, 384, 424 F.2d 859, 872 (1970); cf. K. Davis, Administrative Law of the Seventies § 22.02-11, at 509 (1976); Currie, The Supreme Court and Federal Jurisdiction: 1975 Term,1976 Sup.Ct.Rev. 183, 184. If the plaintiff fails the statutory test of showing the challenged action has adversely affected him, we need not address the constitutional issue. To meet this threshold requirement, a plaintiff must demonstrate ²² that the challenged acts have harmed him or that he personally would benefit in some tangible manner from the court's intervention in the controversy. See Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 220-22, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974); Evans v. Lynn, 537 F.2d 571, 595 (2d Cir. 1976) (en banc). An association may seek relief not only for any institutional injuries which it might have suffered, but also as a representative of its members if those members would have standing if they themselves brought suit. Warth v. Seldin, supra, 422 U.S. at 511, 95 S.Ct. 2197; see Sierra Club v. Morton, 405 U.S. 727, 734-41, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). As noted above, MDNA has not claimed that it has suffered any injury to an institutional interest. Therefore, its standing to challenge the sale of Plant No. 14 depends on a demonstration that one or more of its members have suffered an "injury in fact".

A. Characteristics of Injury in Fact

An "injury in fact" need not be substantial to support federal court jurisdiction over this challenge to agency action; an identifiable trifle will suffice. United States v. SCRAP, supra, 412 U.S. at 689 n.14, 93 S.Ct. 2405; K. Davis, Administrative Law Treatise §§ 22.09-5, 22.09-6 (Supp.1970). The injury may be one which MDNA's members have already sustained Standing alone, these generalized criteria for assessing the jurisdictional adequacy of a demonstration of "injury in fact" are...