Progressive Industries, Inc. v. United States ( 2015 )

In the United States Court of Federal Claims
No. 14-1225C
(Re-Issued with Keywords: April 17, 2015)1
)
PROGRESSIVE INDUSTRIES, INC., )
) Responsive Pleading Requirements
Plaintiff, ) for Intervenor in Bid Protest
) Context; Timeliness and Sufficiency
v. ) of Intervenor Pleading; Notice and
) Pleading Requirements for Motion
THE UNITED STATES, ) to Intervene under RCFC 24(c);
) Entitlement to Intervention as of
Defendant, ) Right under RCFC 24(a).
)
v. )
)
IRISH OXYGEN CO., )
)
Defendant-Intervenor. )
)
ORDER GRANTING MOTION TO INTERVENE
On February 20, 2015, Irish Oxygen Company (Irish Oxygen) filed a Notice of
Motion and Motion to Intervene (motion, motion to intervene, or Mot. to Intervene), ECF
No. 26, Memorandum of Law in Support (Mem.), ECF No. 26-1, and Affidavit in
Support, ECF No. 26-2, seeking intervention as of right under Rule 24(a)(2) of the Rules
of the Court of Federal Claims (RCFC), or alternatively, a permissive intervention under
RCFC 24(b)(1)(B).
Finding Irish Oxygen to be entitled to intervene as a matter of right, the court
granted its motion on February 27, 2015. ECF No. 30. Shortly thereafter, on March 2,
2015, plaintiff filed an Opposition to Irish Oxygen’s Motion to Intervene and Motion for
Reconsideration of This Court’s Order Granting Intervention and Access to an
Unredacted Administrative Record (plaintiff’s response or Pl.’s Resp.), ECF No. 33.
1
This order was originally filed on April 13, 2015. ECF No. 45. It is now re-issued
to include keywords for administrative purposes only.
In order to consider the arguments raised by plaintiff in its opposition, the court
struck, by order dated March 3, 2015, its earlier order granting intervention to Irish
Oxygen, and took Irish Oxygen’s motion and plaintiff’s response thereto under
advisement for a ruling.2 ECF No. 34.
Further to the court’s March 3, 2015 order, the court has considered the arguments
raised by plaintiff in its opposition to Irish Oxygen’s motion. For the reasons discussed
more fully below, the court finds that Irish Oxygen is entitled to intervention as a matter
of right and GRANTS the motion.
I. Background
Plaintiff filed a post-award bid protest in this court on December 22, 2014. See
Compl., Dec. 22, 2014, ECF No. 1. An initial telephonic status conference was
conducted on December 23, 2014, pursuant to which the parties’ proposed briefing
schedule was adopted, including a tentative date and time for oral argument. See Order,
Dec. 23, 2014, ECF No. 8. Defendant was directed to file, on or before January 9, 2015,
both the administrative record and a status report “to apprise the court of any updates
regarding: (1) defendant intervenors, if any; and (2) the agency’s treatment of certain,
lapsed contracts pending resolution of this case.” Id. at 2 (footnote omitted).
On January 9, 2015, defendant timely filed the status report. See Def.’s Status
Report, ECF No. 10. In its report, defendant’s counsel stated that she had contacted both
awardees with respect to their intentions to intervene in this matter, to which both
awardees responded that they were “uncertain.” Id. at 1. Defendant’s counsel also did
the following: (1) conveyed that the agency would “pursue sole-source procurements to
the incumbent distributors of medical gases during the pendency of this bid protest;” (2)
identified the Veterans Integrated Service Networks (VISNs) that had not yet transitioned
to the awardees; and (3) indicated the number of contracts for which plaintiff was the
incumbent contractor within those VISNs. Id. at 1–2.
On that same day, defendant timely filed the administrative record, ECF No. 12,
for which plaintiff filed its first motion to supplement on January 21, 2015, ECF No. 16.
Pursuant to the court’s order dated January 23, 2015, ECF No. 17, defendant filed an
expedited response to plaintiff’s motion on January 30, 2015, setting forth its objections
2
In that same order, the court also directed the Clerk’s Office to: (1) lift the seal on
plaintiff’s response brief, as it did not contain “competition-sensitive or otherwise
protectable” information; (2) strike Irish Oxygen as defendant-intervenor from the case
caption; (3) remove the access granted to counsel for Irish Oxygen; and (4) strike the
Application for Access to Protected Material filed by counsel for Irish Oxygen on March
3, 2015, ECF No. 32. Order, Mar. 3, 3015, ECF No. 34, at 1–2.
2
to the deposition testimony and certain of the documents sought by plaintiff to be
included in the administrative record, through supplementation, ECF No. 18.
Concurrently, defendant produced documents which inadvertently had been omitted and
sought to add them to the administrative record. See ECF Nos. 19–19-1; see also Order,
Feb. 4, 2015, ECF No. 21 (granting defendant’s unopposed request to file the first
amended administrative record).
On February 4, 2015, the parties filed a joint status report, in which they reported
that the briefing schedule adopted during the initial status conference would be impacted
by plaintiff’s objections to, and defendant’s amendment of, the administrative record.
See Joint Status Report, ECF No. 20. The parties agreed to enlarge the briefing schedule
in order to provide plaintiff with additional time to review the amended administrative
record and to evaluate whether it would press further to supplement the record with
deposition testimony. See id. at ¶ 4–6.
In response to the parties’ requests, the court stayed both the original briefing
deadlines established for the parties’ cross-motions for judgment on the administrative
record and the scheduled oral argument date, pending resolution of plaintiff’s various
objections to the administrative record. See Order, Feb. 4, 2015, ECF No. 21, at 2. The
court explained that the parties’ briefing schedule would be revisited after the court’s
ruling on plaintiff’s motion to supplement the record. Id.
On February 17, 2015, plaintiff filed a motion to withdraw its request for
deposition testimony, seeking instead to supplement the administrative record with “core
documents” under paragraph 22 of Appendix C of the RCFC. ECF No. 23. Plaintiff’s
objections to the administrative record, as detailed in its second motion to supplement,
prompted extensive briefing by the parties, see ECF Nos. 27, 35, 39, as well as multiple
orders by the court, see ECF Nos. 29, 37, 40, 43.
By order dated April 8, 2015, the court resolved the parties’ disputes concerning
completion of the administrative record. See ECF No. 43. Finding the administrative
record to be complete, the court denied plaintiff’s request for “core documents.” See id.
at 10. The court also set forth a new briefing schedule for the parties’ cross-motions for
judgment on the administrative record based on the timeframes proposed by the parties in
their earlier-filed joint status report. See id. at 10–11.
The court turns now to consider the pending motion for intervention.
II. Legal Standards
The “requirements for intervention are to be construed in favor of intervention.”
CHE Consulting, Inc. v. United States, 71 Fed. Cl. 634, 635 (2006) (quoting Cherokee
Nation of Okla. v. United States, 69 Fed. Cl. 148, 152 (2005)).
3
These requirements are found in Rule 24 of the RCFC. Intervention may be
allowed either: (1) as a matter of right under RCFC 24(a); or (2) permissively under
RCFC 24(b).
The requirements for an intervention of right are as follows:
On timely motion, the court must permit anyone to intervene who . . . claims
an interest relating to the property or transaction that is the subject of the
action, and is so situated that disposing of the action may as a practical matter
impair or impede the movant’s ability to protect its interest, unless existing
parties adequately represent that interest.
R. Ct. Fed. Cl. 24(a).
The requirements for permissive intervention differ:
On timely motion, the court may permit anyone to intervene who . . . has a
claim or defense that shares with the main action a common question of law
or fact. . . . In exercising its discretion, the court must consider whether the
intervention will unduly delay or prejudice the adjudication of the original
parties’ rights.
R. Ct. Fed. Cl. 24(b).
Regardless of whether intervention is sought of right or permissively, the
application to intervene must be “timely.” See Chippewa Cree Tribe of the Rocky Boy’s
Reservation v. United States (Chippewa Cree), 85 Fed. Cl. 646, 658 (2009). “Timeliness
must be considered in the context of the proceedings.” Northeast Military Sales, Inc. v.
United States (Northeast Military Sales), 100 Fed. Cl. 100, 102 (2011). “Timeliness ‘is
to be determined by the court in the exercise of its sound discretion’ and it is ‘to be
determined from all the circumstances.” Id. at 101 (quoting NAACP v. New York, 413
U.S. 345, 366 (1973)).
The determination of whether a motion to intervene is timely is informed by the
following three factors: (1) the length of time during which the applicants actually knew
or reasonably should have known of their rights; (2) whether the prejudice to the rights of
existing parties by allowing intervention outweighs the prejudice to the applicants by
denying intervention; and (3) the existence of unusual circumstances militating either for
or against a determination that the application is timely. Id. (citing Chippewa Cree, 85
Fed. Cl. at 658).
4
III. Discussion
Irish Oxygen seeks intervention of right under RCFC 24(a)(2), or alternatively, a
permissive intervention under RCFC 24(b)(1)(B). See Mot. to Intervene ¶¶ 1–7. Irish
Oxygen asserts that “[a]s one of the successful bidders who stands to lose or be forced to
rebid the contract if the [g]overnment’s decision is overturned, [it] has a direct and
immediate interest in the outcome of this matter.” Mem. at 4.
Plaintiff argues that Irish Oxygen’s motion to intervene should be denied because:
(A) the motion is untimely pursuant to RCFC 24(a) and RCFC 24(b); (B) intervention
would unduly delay this matter and prejudice plaintiff under RCFC 24(b); and (C) the
motion fails to satisfy the notice and pleading requirements set forth in RCFC 24(c).
Pl.’s Resp. 2.
Apart from its contention that Irish Oxygen’s motion to intervene is untimely,
plaintiff does not appear to dispute any of the other requirements governing intervention
of right pursuant to RCFC 24(a), specifically that: (1) Irish Oxygen has an interest in the
transaction at issue; (2) disposal of this action may impair or impede Irish Oxygen’s
interests; and (3) defendant may not adequately represent Irish Oxygen’s interest. See
Pl.’s Resp. 2; see also Mem. 4–5 (explaining how Irish Oxygen satisfies the prongs for
intervention of right, including timeliness). Thus, the court turns now to consider the
disputed issue of timeliness.
A. Irish Oxygen’s Motion to Intervene is Timely
Based on consideration of the three “timeliness” factors, the court finds Irish
Oxygen’s motion to intervene to be timely.
1. Irish Oxygen “Knew or Reasonably Should Have Known” of the
Challenged Procurement for Approximately Two Months before It
Sought to Intervene
As to the first factor, the parties do not dispute, and the court agrees, that Irish
Oxygen “knew or reasonably should have known” about this action for approximately
two months before moving to intervene. See Mem. 4 (“This matter was just commenced
on December 22, 2014, less than two months [before the filing of Irish Oxygen’s motion
to intervene on February 20, 2015]”); see also Pl.’s Resp. 4 (“Irish Oxygen knew about
this case for two months before it moved to intervene.”). But this factor alone is not
dispositive.
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2. Denial of the Sought Intervention Would Prejudice Irish Oxygen
With respect to the second factor, plaintiff does not dispute that Irish Oxygen
would be prejudiced if intervention is denied. Instead, the parties dispute whether, and
the extent to which, plaintiff would suffer prejudice as a result of allowing Irish Oxygen
to intervene at this juncture.
Irish Oxygen contends that the prejudice resulting from a denial of intervention
weighs in its favor, and asserts that “[g]iven the relatively early stage of this matter, the
parties [would] not be prejudiced by Irish Oxygen’s intervention.” Mem. 4.
Plaintiff, on the other hand, argues that allowing Irish Oxygen to intervene “would
create additional delay that would be prejudicial” to it. Pl.’s Reply 4. Plaintiff indicates
that further delay in the proceedings would occur because plaintiff would require time to
redact confidential pricing information from the administrative record to accommodate
the sought intervention. Id. at 4–5.
The court is not persuaded by plaintiff’s arguments about such prejudicial delay.
First, the Protective Order now in place renders any redaction by the parties during
the course of the proceedings as unnecessary. See ECF No. 6-1. Recognizing that
“certain information likely to be disclosed orally or in writing during the course of this
litigation may be competition-sensitive or otherwise protectable,” the Protective Order
mandates that “the parties shall comply with the terms and conditions of [the] Protective
Order” to safeguard the confidentiality of any disclosed information. Id. at 1. As the
opportunity for the parties to propose redactions is presented at the end of the
proceedings, plaintiff need not do so at this stage.
Second, as plaintiff points out, the matter of “[t]imeliness must be considered in
the context of the proceedings.” Id. at 4 (citing Northeast Military Sales, 100 Fed. Cl. at
102). In this case, briefing on the parties’ cross-motions for judgment on the
administrative record has not yet begun, and no date for oral argument has been set. At
the parties’ request, see Joint Status Report, Feb. 4, 2015, at ¶ 4, the original briefing
deadlines were stayed pending resolution of the parties’ disputes with respect to the
administrative record, see Order, Feb. 4, 2015, ECF No. 21, at 2. To date, the efforts of
the parties have been dedicated primarily to addressing plaintiff’s objections to the
administrative record. Plaintiff’s concerns about prejudicial delay in reaching the merits
of the protest are unfounded.
Moreover, because Irish Oxygen was awarded “a significant portion of the sealed
bid contract at issue” in the challenged procurement, Mot. to Intervene ¶ 2, the court finds
that the rights of Irish Oxygen would be prejudiced if intervention is not allowed. The
court further finds that any prejudice to plaintiff, by allowing intervention, is far
6
outweighed by the prejudice to Irish Oxygen if intervention is denied. See Northeast
Military Sales, 100 Fed. Cl. at 102 (citing Chippewa Cree, 85 Fed. Cl. at 658).
3. Unusual Circumstances Militate in Favor of Finding Irish Oxygen’s
Motion as Timely
As to the third factor regarding “timeliness,” the court is not persuaded by the
arguments set forth by plaintiff in its opposition, which are supported only by plaintiff’s
misplaced reliance on Northeast Military Sales, Inc. v. United States (Northeast Military
Sales), 100 Fed. Cl. 100, 102 (2011). The facts and procedural posture of that case are
entirely distinguishable from this case.
In Northeast Military Sales, the proposed intervenor admitted its delay in seeking
intervention because the grounds for protest were initially redacted. See 100 Fed. Cl. at
102. The proposed intervenor moved to supplement the record less than forty-eight hours
before oral argument “for the limited purpose” of challenging “inaccurate and misleading
allegations of inflated savings made by protester in connection with [plaintiff’s] internal
Core Items Price Survey forms.” Id.
Unlike the proposed intervenor in that case, Irish Oxygen is not seeking to
intervene on the eve of oral argument for the limited purpose of seeking to amend the
administrative record. Nor would allowing Irish Oxygen to intervene—at this stage of
the proceedings—require a rescheduling of the parties’ cross-motions for judgment on
the administrative record, as intervention in Northeast Military Sales would have
necessitated. See id. Briefing has not yet begun. Nor is there a date for oral argument.
The special circumstances that militated against intervention in that case are not present
here.
Rather, the court finds that the circumstances in this case weigh in favor of
intervention. In the case at bar, it is plaintiff’s requests to supplement, and defendant’s
inadvertent omissions from, the administrative record that have prompted delays in the
parties’ briefing for judgment on the record.
Of note, the extent to which Irish Oxygen’s interests would be affected by this
proceeding did not become clear until defendant clarified, in its filed status report, how
many contracts would remain with the incumbent contractor, plaintiff in this case, rather
than transition to any awardee—to include Irish Oxygen—until the resolution of the bid
protest. See Def.’s Status Report 1–2. To this end and contrary to plaintiff’s assertions,
Irish Oxygen is substantially prejudiced by the protracted nature of this litigation, and it
is plaintiff that benefits.
Based on the foregoing, the court finds that the circumstances in this case counsel
in favor of allowing Irish Oxygen to intervene as a matter of right.
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B. Permissive Intervention Under RCFC 24(b)
Because the court has determined that Irish Oxygen is entitled to intervene as a
matter of right pursuant to RCFC 24(a), the court need not address plaintiff’s arguments
against permissive intervention. See Pl.’s Resp. 2.
C. Irish Oxygen’s Pleading Is Sufficient
Plaintiff asserts that “it is proper for this [c]ourt to deny Irish Oxygen’s [m]otion
to [i]ntervene on the basis that Irish Oxygen failed to attach the pleading required by
RCFC 24(c).” Pl.’s Resp. 7. Plaintiff points to the notice and pleading requirements for
a motion to intervene under RCFC 24(c)—in particular, that “[t]he motion [to intervene]
must state the grounds for the intervention and be accompanied by a pleading that sets
out the claim or defense for which intervention is sought.”3 Id. at 6 (citing RCFC 24(c))
(emphasis in original). Plaintiff also cites to Aeroplate Corp. v. United States (Aeroplate
Corp.), 111 Fed. Cl. 298 (2013), as an example of a case in which the Court of Federal
Claims “den[ied] the motion to intervene and not[ed] that the failure to submit the
pleading mandated by RCFC 24(c) does not meet the requirements for intervention.” Id.
The requirements governing the time for presenting defenses and objections
contained in responsive pleadings are set forth in RCFC 12(a)(1). That rule provides,
inter alia, that: “The United States must file an answer to a complaint within 60 days
after being served with the complaint.” R. Ct. Fed. Cl. 12(a)(1)(A).
But the notice and pleading requirements under RCFC 24(c) to which plaintiff
adverts here must be viewed in concert with the requirements for responsive pleadings
that are imposed on defendant in the bid protest context. The rules governing “Motions
for Judgment on the Administrative Record” are set forth in RCFC 52.1(c). Subpart 3 of
that provision, which addresses the “Effect of a Motion [for Judgment on the
Administrative Record,” states that “[u]nless otherwise provided by order of the court, a
motion under this rule for judgment on the administrative record obviates the
requirements for the filing of an answer under RCFC 12(a)(1).” R. Ct. Fed. Cl.
52.1(c)(3) (emphasis added).
Thus, while RCFC 24(c) requires “a pleading that sets out the claim or defense for
which intervention is sought,” the requirements are modified when the parties are
proceeding on a motion for judgment on the administrative record. Specifically, RCFC
3
RCFC 24(c) sets forth the notice and pleading requirements for a motion to
intervene: “A motion to intervene must be served on the parties as provided in RCFC 5.
The motion must state the grounds for the intervention and be accompanied by a pleading
that sets out the claim or defense for which intervention is sought.” R. Ct. Fed. Cl. 24(c).
8
52.1(c)(3) eliminates the need to file an answer under RCFC 12(a)(1). Thus, defendant in
this case has not filed an answer to plaintiff’s complaint, and the court declines to impose
a greater responsive pleading requirement on Irish Oxygen, the defendant-intervenor,
than the rules have imposed on defendant itself.4
IV. Conclusion
The court finds that Irish Oxygen is entitled to intervene as a matter of right and
accordingly GRANTS its motion to intervene. Further to the foregoing:
(1) The case caption shall be modified, as shown above, to recognize the
participation of Irish Oxygen in the case;
(2) Defendant-intervenor’s counsel shall be deemed admitted to, and bound by
the terms of, the Protective Order filed on December 23, 2014, see ECF No.
6–1; and
(3) Defendant-intervenor shall be subject to the same briefing deadlines as
defendant for the parties’ cross-motions for judgment on the administrative
record as set forth in the court’s order dated April 8, 2015. See ECF No.
43. Also, Irish Oxygen may participate in the filing of a joint status
report, due on or before 5:00 p.m. EST on Wednesday, April 15, 2015,
to indicate an agreed-upon date and time for the scheduling of oral
argument in this matter. See id. at 11.
IT IS SO ORDERED.
s/ Patricia E. Campbell-Smith
PATRICIA E. CAMPBELL-SMITH
Chief Judge
4
As with plaintiff’s earlier reliance on Northeast Military Sales, Inc. v. United
States, 100 Fed. Cl. 100 (2011), plaintiff’s reliance on Aeroplate Corp. v. United States,
111 Fed. Cl. 298 (2013) is also misplaced. In Aeroplate Corp., the court denied a motion
to intervene filed by a judgment creditor against a construction company in two breach-
of-contract suits for reasons that do not apply in this case. Notably, the court in
Aeroplate Corp. found that neither the criteria for an intervention of right under RCFC
24(a), nor for a permissive intervention under RCFC 24(b), were pertinent. See 111 Fed.
Cl. at 299.
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