ROBERT L. WILKINS, District Judge.
Plaintiffs Teton Historic Aviation Foundation and Teton Avjet, LLC, d/b/a "Teton Aviation Center," (collectively, "Teton") bring this case against Defendants United States of America and the United States Department of Defense (collectively, the "Government") under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., claiming that the Government's actions improperly prevented Teton from acquiring a number of surplus aircraft parts under its auction contract with Government Liquidation, LLC — a private, non-governmental entity that is not a party to this action. After submitting the winning bid in that auction, Teton submitted the list of parts it sought to harvest from the five source aircraft included in the auction, and, pursuant to the terms of the contract, Teton's requested parts list was forwarded to the Defense Reutilization and Marketing Service ("DRMS") — a Department of Defense component — for final review and approval.
The parties cross-moved for summary judgment, and on December 21, 2012, the Court notified the parties that it would hold a hearing on those motions. The Court advised that, in addition to the issues presented in their briefs, the parties should be prepared to discuss whether Teton possesses Article III standing to pursue its APA claims against the Government and, specifically, whether a decision from this Court would redress Teton's injury. The Court heard argument from the parties during a lengthy hearing on January 15, 2013. Ultimately, upon consideration of the administrative record in this case, the parties' briefing, and the arguments of counsel, the Court concludes, for the reasons set forth herein, that Teton lacks Article III standing to pursue its claims and will
The relevant history of this case begins with an auction. In August 2008, Government Liquidation, LLC ("GL") — a private, third-party entity with whom the Department of Defense contracts to assist in the sale and disposal of surplus property — posted a bid announcement for the sale of aircraft parts from five "A-4" aircraft bearing tail numbers 154306, 154623, 154337, 153483, and 152863. (Administrative Record ("AR") at 213-215). Among other details, the announcement explained that:
(Id.). The announcement indicated that GL's "special terms and conditions apply to this sale," along with the "general terms and conditions of sale ... which are listed on Government Liquidation[']s web site." (Id.).
The "Special Terms and Conditions of Sale" restated the above description of the aircraft components that might be available through the sale, but it also expressly described components that would not be included:
(Id. at 964-95) (emphasis in original).
(Id.).
Teton participated in the auction, submitting a sealed bid of $8,250.00. As it turns out, Teton was the winning bidder and secured the ability to acquire available parts from the five source aircraft. (Id. at 518-519). Teton deposited $50,000.00 to bind the sale, (id. at 500-502, 857-58), and
DRMS completed its initial review of Teton's requested parts list on or around September 19, 2008, (id. at 554-584), and conducted a further review within the following weeks, (id. at 593-636). Ultimately, DRMS divided all of the aircraft parts requested by Teton into two categories: (1) the "Safe to Sell" list, or (2) the "Ineligible for Sale" list. (Id.). It appears that the "Safe to Sell" list included parts designated as Demil A, B, or Q, while the "Ineligible for Sale" list was comprised of parts classified as Demil C or D. (See id.). However, before DRMS's determinations were communicated to Teton, the Department of Defense issued a revised policy directive, in or around November 2008, which generally prohibited the public sale of items classified as Demil B and Q "sensitive." (Id. at 1658-1662, 2369-2370). As a result, DRMS was required to "rescrub" the listing of parts approved for release to Teton to remove items designated as Demil B and Q. (Id. at 798). Following that process, only about thirty (30) categories of parts were categorized as salable and eligible for release to Teton.
On or around March 13, 2009, GL forwarded the final list of approved parts to Teton, along with AMARG's cost estimate for the removal of the approved parts, and inquired whether Teton would proceed with the sale. (Id. at 904). On March 19th, Todd Burlage, Teton's Parts Manager, responded to GL and advised that Teton was reviewing the information and would communicate its decision. (Id.). Subsequently, on March 27th, GL sent another message to Mr. Burlage, advising that "Government Liquidation needs to proceed with the sale or cancel it"; GL requested that Teton provide a response by close of business on March 30, 2009. (Id.). On March 30, 2009, GL received a letter from Teton's attorney, John Fausti. (Id. at 909-910). Therein, Mr. Fausti stated, in pertinent part:
(Id.). In turn, Mr. Fausti requested an additional seven business days for Teton to consider whether to proceed with the sale. (Id.).
GL granted Teton's request for additional time that same day, (id. at 914), but several days later, Mr. Fausti informed GL that Teton was seeking congressional
(Id. at 929). The following day, April 7, 2009, Mr. Fausti responded, stating that Teton "intends to take all steps necessary to legally enforce the original terms of the subject contract," threatening judicial action and "emergency relief from district court." (Id. at 937-938). By April 10, 2009, Teton had not confirmed that it intended to move forward with the sale offered by GL, which prompted Tim Hill, Director of Customer Relations for GL, to formally notify Mr. Fausti that GL was cancelling its sale with Teton:
(Id. at 964). Shortly thereafter, GL issued a full refund of Teton's $50,000.00 deposit on the sale. (Id. at 967, 1022).
That same day, April 10th, Teton filed the instant action against the Department of Defense, seeking a temporary restraining order to prohibit the destruction or disposition of the aircraft or aircraft parts included in the auction contract between Teton and GL. (Dkt. Nos. 1, 3). In the
Subsequently, Teton amended its complaint several times, and the operative pleading in this matter is now the Third Amended Complaint. (Dkt. No. 38 ("Third Am. Compl.")). Therein, Teton seeks relief against the United States of America and the Department of Defense and alleges, in salient part, that "DRMS's actions in preventing Teton Aviation from taking possession of the surplus aircraft parts to which it was entitled under the Contract constitutes conduct which is arbitrary, capricious, an abuse of discretion and not in accordance with law." (Id. at ¶ 74). Teton seeks the following relief:
(Id. at Prayer ¶¶ a-f). At no point during this litigation did Teton assert claims against, or seek to assert claims against, Government Liquidation.
After the parties had fully briefed their cross-motions for summary judgment, the Court issued an Order on December 21, 2012, setting a hearing on those motions. (Dkt. No. 81). Along with the issues raised in their briefing, the Court advised the parties to be prepared to discuss "[w]hether Plaintiffs have Article III standing to pursue their claims against Defendants and, specifically, whether the relief Plaintiffs seek from this Court can redress the injury they claim was caused
(Id.). Counsel subsequently appeared for a hearing on Plaintiffs' Motion for Summary Judgment, (Dkt. No. 61), and Defendants' Cross-Motion for Summary Judgment, (Dkt. No. 69), on January 15, 2013. The Court heard argument for nearly two hours and ultimately took the matter under advisement.
At the outset, the Court believes it important to recognize that Teton's standing is an issue that was raised by the Court sua sponte. The Government did not argue — either in its earlier motion to dismiss, (see Dkt. Nos. 22, 29), or in its summary judgment briefing — that Teton lacked standing. However, the Court has an obligation to confirm its own jurisdiction, and the D.C. Circuit has instructed that "[w]hen there is doubt about a party's constitutional standing, the court must resolve the doubt, sua sponte if need be." Lee's Summit v. Surface Transp. Bd., 231 F.3d 39, 41 (D.C.Cir.2000); see also Catholic Social Serv. v. Shalala, 12 F.3d 1123, 1125 n. 2 (D.C.Cir.1994) ("Because standing is a jurisdictional doctrine, the Court is obliged to consider the issue sua sponte."). Indeed, where the Court has doubts about a party's standing, it is reversible error to simply bypass the issue of standing and to proceed to the merits of the case, even "where the merits question may be easily answered." Dominguez v. UAL Corp., 666 F.3d 1359, 1361 (D.C.Cir.2012).
The doctrine of standing derives from Article III of the Constitution, which "confines the federal courts to adjudicating actual cases and controversies." Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). To satisfy the "irreducible constitutional minimum of standing" under Article III, a party must show: (1) that it has suffered an "injury in fact" — an actual or imminent invasion of a legally-protected, concrete, and particularized interest; (2) a causal connection between the alleged injury and the defendant's conduct at issue; and (3) that it is "likely," not "speculative," that the injury "will be redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). "This triad ... constitutes the core of Article III's case-or-controversy requirement, and the party invoking federal jurisdiction bears the burden of establishing its existence." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103-04, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). To establish standing at the summary judgment stage, as here, a party "cannot rest on `mere allegations' but must establish each element of standing by putting forth `specific facts.'" Dominguez, 666 F.3d at 1362 (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). If standing is lacking, then "the dispute is not a proper case or controversy, [and] the courts have no business deciding it, or expounding the law in the course of doing so." DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006).
As to the redressability aspect of standing, the D.C. Circuit has repeatedly explained that, "[w]hen redress depends on the cooperation of a third party, `it becomes the burden of the [plaintiff] to adduce facts showing that those choices [of the third party] have been or will be made in such manner as to produce causation and permit redressability of injury.'" US Ecology, Inc. v. United States DOI, 231 F.3d 20, 24-25 (D.C.Cir.2000) (quoting Lujan, 504 U.S. at 562, 112 S.Ct. 2130); see also Miami Bldg. & Constr. Trades Council v. Sec'y of Def., 493 F.3d 201, 205-07 (D.C.Cir.2007). "Mere `unadorned speculation' as to the existence of a relationship between the challenged government action and the third-party conduct `will not suffice to invoke the federal judicial power.'" Nat'l Wrestling Coaches Ass'n v. Dep't of Educ., 366 F.3d 930, 938 (D.C.Cir.2004) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 44, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976)).
Teton does invoke a cognizable injury for standing purposes: its inability to "tak[e] possession of the surplus aircraft parts to which it was entitled under the Contract." (Third Am. Compl. at ¶ 74).
Nor has Teton initiated any legal action against GL to enforce its rights under that contract, whether by challenging the validity of GL's cancellation of the contract or otherwise — a point expressly conceded by Teton's counsel during oral argument. To the extent it could be suggested that, after obtaining a declaratory judgment from this Court, Teton can then proceed to sue GL to enforce its rights under the contract — an argument that the Court emphasizes Teton did not advance at oral argument — "that is essentially a concession that the redressability requirement cannot currently be met." Univ. Med. Ctr. v. Shalala, 173 F.3d 438, 442 (D.C.Cir.1999) (explaining that "[r]edressability must be satisfied now to establish jurisdiction").
Several of the above-cited cases from our Circuit lend support to this conclusion. In Miami Building, for example, after several construction company plaintiffs contracted with Miami-Dade County to build a commercial airport on surplus Air Force land, the Air Force ultimately decided not to convey the land to Miami-Dade for use as a commercial airport. Miami Bldg., 493 F.3d at 202-04. When the Air Force instead offered the land for "mixed use purposes," the construction plaintiffs and Miami-Dade County both brought suit against the Air Force, but Miami-Dade dismissed its lawsuit and elected instead to proceed with the purchase of the land for "mixed use purposes." Id. On appeal, the D.C. Circuit succinctly summarized the construction plaintiffs' inability to establish standing:
Id. at 202. The Circuit reached a similar result in US Ecology, wherein the plaintiff sought review of the Secretary of the Interior's decision not to convey a particular site to the State of California for the construction of a low-level radioactive waste facility. 231 F.3d at 24-26. The court concluded that the plaintiff's injury was not redressable by the Court because, even if the Secretary's decision were reversed and the land were offered to the State of California, the plaintiff could not "demonstrate any legally enforceable right that California must (1) accept the Ward Valley Site if offered, and (2) proceed with plans to build a [low-level radioactive waste] facility on the land." Id. Given the plaintiff's inability to establish standing, the Court of Appeals held that it lacked jurisdiction to hear the dispute. These principles apply with equal force here. Even if this Court were to issue a declaratory judgment finding that the Government's review of the aircraft parts was arbitrary and capricious, the Court cannot predict with any confidence that GL can or will honor its original contract with Teton to sell any of those surplus parts.
Seemingly recognizing these deficiencies, Teton backpedaled from this particular approach to redressability at oral argument and presented a slightly different twist on its standing theory. Rather than arguing that it holds a present right to acquire surplus aircraft parts from A-4 aircraft, Teton essentially contends that a favorable ruling from the Court on its APA claims would likely enable Teton to acquire those parts in the future. According to Teton, if the Court declares that the Government's classification of particular parts was arbitrary and capricious, not only would Teton be able to bid on and purchase those parts from the five aircraft currently being preserved by the injunction in this case, but it could also compete for future contracts on parts from any A-4 aircraft put up for auction. The problem with Teton's theory, however, is that it presents no evidence to establish that any such outcome is likely, and in fact, the administrative record suggests exactly the opposite.
Put differently, regardless of how the Court were to rule on the propriety of the Government's classification of particular aircraft parts, Teton does not show that it is likely that the Government will offer parts from the five aircraft currently being held (or from any other A-4 aircraft, for that matter) for sale to the public through a future auction. Teton does not identify any statute or regulation that requires the Department of Defense to make these aircraft available for sale, and the Court is not independently aware of such authority. In fact, counsel for Teton expressly conceded that it is entirely within the Government's discretion whether to offer these aircraft (or their component parts) for public sale in the first place.
Furthermore, an affidavit submitted by the Government confirms that many of the A-4 aircraft held by the Government are slated for other purposes, including parts reclamation for other active aircraft in the Navy's fleet, foreign military sales, and potential museum placement. (Dkt. No. 68-1 at ¶¶ 17-21). While the affidavit states that the particular aircraft covered by the injunction have all been "turned over the DLA for eventual disposal," (id. at ¶ 21), this does not mean that it is likely that DLA Disposition Services will ultimately convey those aircraft to GL for public auction. Rather, DLA Disposition Services (formerly DRMS) disposes of surplus goods in any number of ways, including by destruction or shredding — an outcome that seems particularly likely here, given that after GL canceled its contract with Teton, the original source aircraft were destroyed, rather than being offered for auction and sale to another buyer. (AR at 80-85, 96-97, 102-103). In fact, Teton's own briefing points out that, at least as of a few years ago, the Government's intent appeared to be to destroy and shred all A-4 aircraft moving forward, rather than to release parts from those planes for sale to the public. (See id. at 123 (explaining that Navy A-4 aircraft turned over were meant for disposal and shredding), 269 (explaining that DRMS did not anticipate receiving any "future A4 aircraft as the Navy is destroying them")). Accordingly, the Court concludes that Teton fails to establish that it is likely, as opposed to merely speculative, that a favorable decision from this Court will redress the injury it attributes to the Government's challenged actions.
None of the cases raised by Teton's counsel during the hearing change this result. First, Teton relied heavily on Abigail Alliance for Better Access v. Eschenbach, 469 F.3d 129, 135 (D.C.Cir.2006), arguing that it will likely be able to acquire surplus aircraft parts in the future because it will be in GL's "pecuniary interest" to put the replacement aircraft (or other A-4 aircraft) up for public auction. This argument is unavailing. First, Teton incorrectly assumes that GL holds title to any A-4 aircraft in the first place — and if GL does not own or control the aircraft, it certainly cannot make the decision to put the aircraft up for sale. To the contrary, the only evidence before the Court on this issue indicates that the planes covered by the injunction are currently being held by DLA Disposition Services, and not GL. Nor does Teton present evidence — in the administrative record or otherwise — to establish that any A-4 aircraft are in the possession, control, or ownership of GL. But even if GL did presently possess any A-4 aircraft, the procedural history of this dispute and the evidence in the administrative record belie the conclusion that GL would sell the aircraft for pecuniary gain, given that, after GL canceled its original contract with Teton, it did not attempt to resell the five source aircraft to another bidder. Instead, they were simply destroyed.
In addition, Teton placed particular emphasis on CC Distributors, Inc. v. United States, 883 F.2d 146, 151 (D.C.Cir.1989), in arguing that a favorable decision from the Court is likely to redress its injury because Teton will be able to "compete" for a contract to purchase the surplus aircraft parts it seeks in the future, even if it cannot say for sure whether it will ultimately be awarded a contract. This argument also misses the mark. It is true that the loss of the ability to compete for a contract can constitute a cognizable injury for Article III standing purposes. But to compete for a contract, there must be a contract to compete for in the first place, and, as set forth above, Teton simply does not establish a likelihood that the Government will place any additional A-4 aircraft up for auction in the future, whether through GL or otherwise.
As a final effort to establish standing, Teton suggested, in conclusory fashion, that its injuries are not dependent on a third party because GL is not truly an independent third party from the Government. In so arguing, Teton pointed to two general statements in the Government's briefing and claimed that, while GL is technically the contracting party, the Government controls the ultimate outcome. But neither the administrative record nor any other evidence before the Court supports this assertion, and at this stage, Teton cannot rely on "mere allegations" to establish standing. Lujan, 504 U.S. at 561, 112 S.Ct. 2130; Dominguez, 666 F.3d at 1362.
Ultimately, because Teton's injury is not likely to be redressed by a favorable decision from the Court, the Court concludes that Teton lacks Article III standing to pursue its claims in this case. In reaching this conclusion, the Court is mindful that the relevant question is not whether it is certain that the Court's decision will redress GL's injury, but only whether it is likely. Lujan, 504 U.S. at 561, 112 S.Ct. 2130. But based on the present posture of this dispute and the record before the Court, Teton simply fails to meet this standard.
For the reasons set forth above, the Court concludes that Teton lacks Article III standing to pursue its claims and will therefore