Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-02152/USCOURTS-cand-4_06-cv-02152-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

INTERNATIONAL ORGANIZATION OF

MASTERS, MATES AND PILOTS, PACIFIC

MARITIME REGION,

Plaintiff,

v.

NATIONAL PARK SERVICE, et al.,

Defendants.

 /

INLANDBOATMEN'S UNION OF THE PACIFIC,

MARINE DIVISION, ILWU,

Plaintiff,

v.

FRAN MAINELLA, et al.,

Defendants.

 /

No. C 06-2107-CW

No. C 06-2152-CW

(RELATED CASE)

ORDER ON

PLAINTIFFS'

MOTIONS FOR

PRELIMINARY

INJUNCTION

Plaintiffs International Organization of Masters, Mates and

Pilots, Pacific Maritime Region (MM&P) and Inlandboatmen's Union of

the Pacific, Marine Division, ILWU (IBU) separately move for

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United States District Court

For the Northern District of California

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The SCA requires contractors to pay their service employees

"in accordance with prevailing rates for such employees in the

locality" as determined by the Department of Labor, or "where a

collective bargaining agreement covers such service employees, in

accordance with the rates . . . provided for in [that] agreement." 

41 U.S.C. § 351(a)(1). 

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preliminary injunctions, seeking to stop Defendants National Park

Service (NPS) and NPS Director Fran Mainella from awarding a

concession contract to Intervener Hornblower Yachts. Plaintiffs

contend that this contract would violate the 1965 McNamara-O'Hara

Service Contract Act (SCA), 41 U.S.C. § 351.1 Defendants and

Intervener oppose these motions. The matter was heard on April 28,

2006. On May 1, 2006, the Court, for the reasons expressed in this

order, granted Plaintiff MM&P's motion, granted in part Plaintiff

IBU's motion and stayed the case.

BACKGROUND

Over a million visitors flock to Alcatraz Island each year;

ferries shuttle those visitors to and from the island. Currently, 

under a 1983 contract (the original concession contract), Blue &

Gold Fleet provides transportation services to and from Alcatraz

Island. Pursuant to the Concessions Policy Act of 1965, Public Law

89-249, 79 Stat. 969 (the 1965 Concessions Act), the original

concession contract was entered into by Defendant NPS and Harbor

Carrier, Inc., for the fifteen year period beginning January 1,

1984, and ending December 31, 1998. Approximately a year and a

half before the contract was due to expire, it was assigned to Blue

& Gold Fleet. 

Before the original concession contract expired, Congress

enacted the National Park Service Concessions Management

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Improvement Act of 1998 (the 1998 Concessions Act), which repealed

the 1965 Concessions Act and established "a new, comprehensive

concession management program." S. Rep. No. 105-202, at 20 (1998). 

Unlike the 1965 Concessions Act, the 1998 Concessions Act requires

that concession contracts be awarded on a competitive basis to the

entity submitting the best proposal. The 1998 Concessions Act

instructs that, in selecting the best proposal, the following

factors must be considered: (1) the responsiveness of the proposal

to the objectives of protecting and preserving park resources and

of providing services to the public at reasonable rates; (2) the

experience and related background of the entity submitting the

proposal; (3) the financial capability of the entity submitting the

proposal; and (4) the proposed franchise fee, although the

consideration of revenue is to be subordinate to the objectives of

protecting and preserving park resources and of providing services

to the public at reasonable rates. Id. at 30; 16 U.S.C.

§ 5952(5)(A). In addition, the 1998 Concessions Act requires that

any proposed concession contract with anticipated annual gross

receipts in excess of five million dollars, or a duration of more

than ten years, must be submitted to Congress at least sixty days

before it is awarded. 16 U.S.C. § 5952(6).

The original concession contract was extended under the 1998

Concessions Act. The contract requires that, upon the request of

Defendant NPS, Blue & Gold Fleet continue to conduct operations for

a reasonable time to allow selection of a successor. Blue & Gold

Fleet has accepted Defendant NPS's requests for extensions and

continuations of service. The contract is now due to expire on May

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31, 2006. According to Blue & Gold Fleet's Executive Vice

President, the company is willing and able to continue providing

ferry service to Alcatraz Island as it has since 1997.

On July 27, 2004, Defendant NPS issued a solicitation seeking

proposals for a new ten-year concession contract for transportation

and other visitor services for Alcatraz Island. The solicitation

and the draft of the new concession contract attached to it did not

contain any information specifying minimum wages and fringe

benefits for service employees or any other information concerning

wages and benefits that would be required by the SCA. Instead, the

solicitation stated that it was being issued pursuant to the

authority of the 1998 Concessions Act and its implementing

regulations, 36 C.F.R. Part 51, and included a copy of the

regulations. Among the implementing regulations is 36 C.F.R.

§ 51.3, which provides, "Concession contracts are not contracts

within the meaning of 41 U.S.C. 601 et seq. (the Contract Disputes

Act) and are not service or procurement contracts within the

meaning of statutes, regulations or policies that apply only to

federal service contracts or other types of federal procurement

actions." 

The solicitation also included instructions directing offerors

to submit comments to Defendant NPS in writing no later than thirty

days prior to the due date for proposals if they believed any

statement in the solicitation to be inaccurate. No offerors did. 

The instructions also directed that, if offerors did not understand

something in the solicitation, they should submit questions in

writing to Mr. Lee Shenk. Although Mr. Shenk received several

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written questions prior to the deadline set for submission of such

questions, none of those questions concerned the SCA or wages and

benefits required under the new concession contract.

Four proposals were submitted, including one from Blue & Gold

Fleet. In September, 2005, Defendant NPS announced that

Intervener's proposal had been selected as the best proposal

received. 

On November 15, 2005, Blue & Gold Fleet filed in the United

States Court of Federal Claims a pre-award protest of the selection

of Intervener for the new concession contract. Among the issues

raised was whether the SCA applied to the contract. On November

17, 2005, the court allowed Intervener to intervene in that case. 

Two months later, the court allowed Plaintiffs to file amicus

briefs in support of Blue & Gold Fleet.

On November 30, 2005, Plaintiffs sent a joint letter to the

Department of Labor (DOL), requesting a formal determination of

whether the SCA applies to the proposed contract with Intervener. 

On January 6, 2006, DOL's Wage and Hour Division issued a letter to

Defendant Mainella, stating that "the SCA applies to all contracts

entered into by the United States or the District of Columbia that

are principally for the furnishing of services through the use of

service employees." Preliminarily finding that the SCA applies to

the contract in question, the DOL ordered Defendant NPS to provide

it "with the reasons for not including SCA" in the contract "within

21 days of the date of this letter." Defendant NPS did not do so;

instead, it requested an extension until March 31, 2006. On

April 7, 2006, Defendant NPS responded to the DOL's letter,

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asserting that "NPS concession contracts are governed exclusively

by the NPS Concessions Management Improvement Act of 1998, and that

the SCA does not apply" to the new concession contract.

On March 6, 2006, the Federal Claims Court issued its decision

in Blue & Gold Fleet v. United States; the court granted Defendant

NPS and Intervener's motions for judgment on the administrative

record and dismissed Blue & Gold Fleet's protest. The court did

not reach the merits of Blue & Gold Fleet's SCA claim, finding that

Blue & Gold Fleet had waived its SCA claim by failing to raise it

before submitting a proposal in response to the solicitation. That

same day, Blue & Gold Fleet appealed the court's order. It also

filed motions in the Court of Federal Claims and the Federal

Circuit for injunctions pending appeal to enjoin NPS from awarding

the new concession contract. The motion was denied by the Court of

Federal Claims; the motion in the Federal Circuit is still pending.

After the Federal Claims Court issued its judgment, Defendant

NPS submitted the proposed new concession contract to Congress

pursuant to 16 U.S.C. § 5952(6). The sixty-day notification period

expired on May 7, 2006, and, if Defendant NPS were not enjoined, it

would have been able to award the new concession contract to

Intervener. 

Plaintiffs are Unions; their members include employees of Blue

& Gold Fleet. Intervener's employees, however, are not unionized,

and Intervener has no obligation under the new concession contract

to pay its employees the same wages, or provide the same benefits,

that were provided to Blue & Gold Fleet's employees under the

original concession contract. According to Plaintiffs, awarding

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the new concession contract, without requiring that the contractor

comply with the SCA, will result not only in the loss of jobs and

income for their members, but will also depress area wage and

benefit standards in the entire maritime industry in California. 

LEGAL STANDARD

To obtain a preliminary injunction, the moving party must

establish either: (1) a combination of probable success on the

merits and the possibility of irreparable harm, or (2) that serious

questions regarding the merits exist and the balance of hardships

tips sharply in the moving party's favor. Rodeo Collection, Ltd.

v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987).

The test is a "continuum in which the required showing of harm

varies inversely with the required showing of meritoriousness." 

Id. (quoting San Diego Comm. Against Registration & the Draft v.

Governing Bd. of Grossmont Union High Sch. Dist., 790 F.2d 1471,

1473 n.3 (9th Cir. 1986)). The moving party ordinarily must show

"a significant threat of irreparable injury," although there is "a

sliding scale in which the required degree of irreparable harm

increases as the probability of success decreases," United States

v. Odessa Union Warehouse Co-op, 833 F.2d 172, 174, 175 (9th Cir.

1987), and vice versa. To overcome a weak showing of merit, a

plaintiff seeking a preliminary injunction must make a very strong

showing that the balance of hardships is in its favor. Rodeo

Collection, 812 F.2d at 1217.

DISCUSSION

Plaintiff MP&P seeks a preliminary injunction barring

Defendants NPS and Mainella from awarding a new concession contract

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to Intervener that violates the SCA by allowing Intervener to pay

less than the wages and benefits specified in MM&P's collective

bargaining agreement with the predecessor contractor, Blue & Gold

Fleet. Plaintiff IBU seeks a broader injunction. It seeks to

enjoin Defendants (1) from awarding any NPS concession contracts,

the principle purpose of which is to furnish transportation

services, in response to a solicitation that does not expressly set

forth the applicability of the SCA; and (2) from allowing any

contractor on any concession contract, the principle purpose of

which is to provide transportation services, to pay their employees

wages and fringe benefits lower than those required by the SCA. 

Defendants and Intervener contend that Plaintiffs are not entitled

to relief. 

I. Standing

Defendants argue that Plaintiffs lack standing to bring these

suits because they are not within the zone of interest to be

protected by the SCA. But, as Plaintiffs note, this argument

ignores the specific injuries Plaintiffs claim and controlling

Ninth Circuit case law. Unlike in other cases cited by Defendants,

Plaintiffs here are not merely claiming lost jobs. Instead, they

have alleged that by refusing to apply the SCA to the new

concession contract, Defendant NPS has proximately caused injury

and will continue to threaten to injure both Plaintiffs and their

members by: (1) depriving them of the SCA's protections against

wage-slashing competition that would, otherwise, substantially

reduce their current job security; (2) denying them the opportunity

to keep their jobs with Blue & Gold Fleet by having their current

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wage compensation package serve as the uniform standard for

prospective contractors as required by the SCA; (3) denying them

the opportunity to compete for and retain their job duties with

Intervener without suffering a decrease in wages and benefits; and

(4) depressing the area standards that Plaintiffs have struggled to

secure through collective bargaining and thereby undermining

Plaintiffs' bargaining power and ability to represent their members

effectively in future collective bargaining with other maritime

employers in the San Francisco Bay Area. 

In International Longshoremen's and Warehousemen's Union v.

Meese, 891 F.2d 1374, 1377 (9th Cir. 1989), the Ninth Circuit held

that the government's failure to require a third-party employer to

comply with federal law proximately caused injury to the union and

its members by denying them "the opportunity to compete" for

similar work, and thus the union had standing to challenge the

government's failure to enforce the law. Plaintiffs claim the same

type of injury here. According to Plaintiffs, they were denied the

opportunity to compete with others on wage terms which all federal

contracts must observe under the SCA but which the government, as

in ILWU, refuses to enforce; thus, they too have standing. 

Defendants attempt to distinguish ILWU, noting that, there, the

court found that the plaintiffs came within the zone of interest of

the Immigration and Naturalization Act, not the SCA. Their

attempt, however, fails. Although different statutes are involved,

the holding in ILWU is applicable to this case.

The Ninth Circuit has instructed that the zone of interest

test "is to be construed generously," and "a court should deny

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standing under the 'zone of interest' test only 'if the plaintiff's

interests are so marginally related to or inconsistent with the

purposes implicit in the statute that it cannot reasonably be

assumed that Congress intended to permit the suit.'" City of

Sausalito v. O'Neill, 386 F.3d 1186, 1200 (9th Cir. 2004) (quoting

Clarke v. Secs. Indus. Ass'n, 479 U.S. 388, 399 (1987)). 

As explained in American Federation of Government Employees,

Local 1668 v. Dunn, 561 F.2d 1310 (9th Cir. 1977),

The legislative history reveals that the Service Contract

Act was passed in reaction to Congress' finding that a

depressed wage level prevailed in private service

employment. These service employees were not covered, in

many instances, by the Fair Labor Standards Act or by

state minimum wage rates, resulting in a situation where

contractors paying the lowest wage would secure most

government jobs. Congress, feeling that in this way “the

Government is in effect subsidizing subminimum wages,"

passed the Service Contract Act to insure “that the

Federal Government shall not be a party to the depressing

of labor standards in any area of the nation.” The

purpose statement of the Service Contract Act states: “The

purpose of this bill is to provide labor standards for the

protection of employees of contractors and subcontractors

furnishing services to or performing maintenance service

for Federal agencies.”

561 F.2d at 1312 (citations omitted). In AFGE, the court found

that the plaintiff did not have standing under the SCA because the

service employees it represented were government employees, not

"employees of contractors and subcontractors." Id. There, the

plaintiff's interests were different from the purpose of the SCA,

which was enacted explicitly for the benefit of employees of

contractors and subcontractors. In arguing that Plaintiffs do not

have standing under AFGE, Defendants fail to note that, unlike the

plaintiff in AFGE, Plaintiffs here represent employees of

contractors. Instead, Defendants argue that to have standing a

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plaintiff must be an employee of the successor contractor whose

wages or other benefits are below what is required under the SCA. 

AFGE, however, does not support that argument. 

Defendants cite no case from this circuit holding that a union

representing employees of a current federal contractor lacks

standing to sue for application of the SCA to a contract for

services, being performed by its members for the government, that

is now subject to re-bidding. The out-of-circuit cases that

Defendants cite are distinguishable. For example, in National

Maritime Union of America v. Commander, Military Sealift Command,

824 F.2d 1228, 1235 (D.C. Cir. 1987), the court specifically noted

that the unions, which represented government employees and not

employees of private-sector federal contractors, did not allege as

injury any threat that the winning contractor would pay less than

the prevailing wages and benefits under the SCA: "Indeed, the

Unions could not allege any such injury in this case, since the

contract specifically requires [the contractor] to pay, retroactive

to the date of the award, whatever wages and benefits the Secretary

ultimately determines to be 'prevailing.'” 

Plaintiffs have standing to seek injunctive relief requiring

Defendants to apply the SCA to the new concession contract. 

Defendants' actions have allegedly caused Plaintiffs and their

members injury which is likely to be redressed by a favorable

decision from the Court. See Valley Forge Christian College v.

Americans United for Separation of Church and State, 454 U.S. 464,

472 (1982); Steel Co. v. Citizens for a Better Environment, 523

U.S. 83 (1998). And, when the zone of interest test is construed

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generously as the Ninth Circuit requires, Plaintiffs, whose members

include service employees the SCA was enacted to protect, are

within the zone of interest protected by the SCA. 

II. Time-Barred

Defendants argue that Plaintiffs' challenge to 36 C.F.R.

§ 51.3, which provides that laws such as the SCA do not apply to

NPS concession contracts, is time-barred under either 28 U.S.C.

§ 1658 (four-year statute of limitations) or 28 U.S.C. § 2401(a)

(six-year statute of limitations). As Defendants note, this

regulation was promulgated in the Federal Register on April 17,

2000, and a similar regulation, which existed until it was replaced

by 36 C.F.R. § 51.3, was promulgated in 1982.

Claims challenging specific application of an unlawful

regulation accrue at the time the regulation is actually applied,

not when the regulation was first promulgated. See Wind River

Mining Corp. v. United States, 946 F.2d 710, 713 (9th Cir. 1991);

Natural Res. Def. Council, Inc. v. Evans, 279 F. Supp. 2d 1129,

1148 (N.D. Cal. 2003). The solicitation for the new concession

contract was issued on July 27, 2004. Thus, Plaintiffs' challenge

is not time-barred. 

III. Res Judicata

Intervener argues that, as a result of the judgment entered by

the Court of Federal Claims in Blue & Gold Fleet v. United States,

Plaintiffs' claims are barred by res judicata. The claims in this

case and in Blue & Gold Fleet v. United States arise from "the same

transactional nucleus of facts," namely, the solicitation, bidding

and award of the new concession contract. Tahoe-Sierra Pres.

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Council, Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1078

(9th Cir. 2003). Intervener notes that the Ninth Circuit has found

that, for purposes of applying collateral estoppel or res judicata,

courts are "no longer bound by rigid definitions of parties or

their privies." United States v. ITT Rayonier, Inc., 627 F.2d 996,

1003 (9th Cir. 1980). Plaintiffs may be bound by the court's

judgment if they "had a sufficient interest and participated in the

prior action." Id.

Intervener points out that Plaintiffs had a sufficient

interest and that they participated as amici in Blue & Gold Fleet's

protest in the Court of Federal Claims. Thus, Intervener argues

that Plaintiffs should be bound by that judgment. 

Certainly, Plaintiffs had an interest in the prior action. 

However, it cannot be said that they participated in the action

merely by submitting amicus briefs. As the Ninth Circuit explains,

"We deny preclusive effect, in general, when the adjudicator lacks

jurisdiction to determine an issue, when the parties lacked an

adequate opportunity to litigate an issue, or when some other

aspect of due process, the 'full and fair opportunity' to litigate,

is missing." Miller v. County of Santa Cruz, 39 F.3d 1030, 1038

(9th Cir. 1994). Plaintiffs could not have joined as a party to

Blue & Gold Fleet's pre-award protest because jurisdiction to

challenge a bidding process is limited to "an actual or prospective

bidder or offeror whose direct economic interest would be affected

by the award of the contract or by the failure to award the

contract." Am. Fed'n of Gov't Employees v. United States, 258 F.3d

1294, 1302 (Fed. Cir. 2001) (holding that, because they were not

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actual or prospective bidders, unions lacked standing to bring bid

protest actions in the Court of Federal Claims). Plaintiffs did

not have a full and fair opportunity to litigate whether the SCA

applied to the new concession contract. The court rejected Blue &

Gold Fleet's SCA claim without reaching the merits; the court found

that Blue & Gold Fleet waived its SCA claim by not raising the

issue before submitting its proposal. 

There is no indication that Blue & Gold Fleet was acting on

behalf of Plaintiffs in the Federal Claims Court action. See FTC

v. Garvey, 383 F.3d 891, 898 (9th Cir. 2004). Blue & Gold Fleet

sought to prevent the new concession contract from being awarded to

Intervener because it wanted the contract. Plaintiffs seek to

ensure that area wage and benefits standards are maintained

regardless of who is awarded the contract. Res judicata does not

bar Plaintiffs from bring their claim before this Court. 

IV. Other Proceedings

Defendants and Intervener contend that this case is currently

being reviewed by the Federal Circuit, Congress and the DOL. They

urge the Court to defer ruling on the motions for preliminary

injunction and to stay these proceedings.

As discussed above, however, this case is not before the

Federal Circuit. Plaintiffs are not parties in the case before the

Federal Circuit and Blue & Gold Fleet does not represent their

interests. The Federal Circuit, like the Court of Federal Claims,

may not even address the merits of whether the SCA applies to the

new concession contract; instead, it too could focus only on Blue &

Gold Fleet's timeliness in raising that argument. Staying this

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action pending the Federal Circuit's ruling, without a preliminary

injunction, would allow Defendants to award the new concession

contract to Intervener.

Nor is this case before Congress. Although 16 U.S.C.

§ 5952(6) requires that proposed concession contracts be submitted

to two Congressional committees sixty days before the contracts can

be awarded, that statute does not provide that those committees

will review the contracts to ensure that they comply with other

statutes, such as the SCA. The sixty day period has passed.

This case, however, is before the DOL. As noted above, the

DOL issued a preliminary determination that the SCA applies to the

concession contract. But Defendants and Intervener provide no

reason to defer ruling on the motions for preliminary injunction

until the DOL issues its final determination. A stay pending the

DOL's decision, without ruling on the motions, would be

inconsistent with the DOL's preliminary ruling. Furthermore, by

submitting their response over two months after the DOL requested

it, Defendants have delayed the DOL's final ruling. Plaintiffs

should not have to suffer irreparable and imminent harm while

waiting for completion of the DOL's review, which might have been

completed had Defendants timely filed their response. See

Aleknagik Natives Ltd. v. Andrus, 648 F.2d 496, 499 (9th Cir. 1980)

(judicial intervention is appropriate where administrative remedies

are inadequate, futile or where irreparable injury will result

unless immediate judicial review is permitted).

For these reasons, the Court, in its May 1, 2006 order, stayed

this case pending the DOL's determination of whether the SCA

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applies to the concession contract at issue. During the stay,

however, the preliminary injunction will be in effect.

V. Merits

Plaintiffs contend that they are likely to succeed on the

merits. According to Plaintiffs, the new concession contract, like

all concession contracts involving transportation, is subject to

the SCA; thus, 36 C.F.R. § 51.3, as interpreted and applied, is

arbitrary, capricious and unlawful.

 Enacted in 1965, the SCA states that it applies to "[e]very

contract (and any bid specification therefor) entered into by the

United States or the District of Columbia in excess of $2,500,

except as provided in section 356 of this title, whether negotiated

or advertised, the principal purpose of which is to furnish

services in the United States through the use of service

employees." 41 U.S.C. § 351. The SCA provides that the Secretary

of Labor may make regulations allowing reasonable exemptions to and

from any and all provisions of the Act, but only when the Secretary

determines that such exemptions are necessary and proper in the

public interest. 41 U.S.C. § 351. 

Three years after the statute's enactment, the DOL issued the

following regulation:

It is not considered that the Act was intended to cover

every contract, however, which is entered into with the

Government by a contract to furnish services, no matter

how indirect or remote a benefit the Government may

derive therefrom. If, for example, a contract with the

Government grants the Contractor the privilege of

operating as a concessionaire in a Government park for

the purpose of furnishing services to the public

generally rather than to the Government or to personnel

engaged in its business, the contract is not considered

subject to the Act.

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33 Fed. Reg. 9880, 9891 (July 10, 1968). 

In 1983, however, the DOL revised that regulation. It now

provides:

The Department of Labor, pursuant to section 4(b) of the

Act, exempts from the provisions of the Act certain kinds

of concession contracts providing services to the general

public, as provided herein. Specifically, concession

contracts (such as those entered into by the National

Park Service) principally for the furnishing of food,

lodging, automobile fuel, souvenirs, newspaper stands,

and recreational equipment to the general public, as

distinguished from the United States Government or its

personnel, are exempt. This exemption is necessary and

proper in the public interest and is in accord with the

remedial purpose of the Act. Where concession contracts,

however, include substantial requirements for services

other than those stated, those services are not exempt.

29 C.F.R. § 4.133(b).

Here, there is no dispute that the new concession contract is

in excess of $2,500. Nor is there a dispute that its principal

purpose is to furnish services in the United States. The

solicitation provides that it seeks a contractor to provide

"transportation service," "computerized reservation and ticketing

service," and maintenance of dock and other facilities. This is

not a contract for "the furnishing of food, lodging, automobile

fuel, souvenirs, newspaper stands, and recreational equipment to

the general public." Id.

Nonetheless, Defendants and Intervener argue that, pursuant to

Defendant NPS's regulation, the SCA does not apply to the new

concession contract or any concession contract. To justify

Defendant NPS's regulation, Defendants point to language in the

SCA's non-codified preamble, which states that the purpose of the

SCA is "to provide labor standards for the protection of employees

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of contractors and subcontractors furnishing services to or

performing maintenance service for Federal agencies." 1965

U.S.C.C.A.N. 3737. They emphasize "furnishing services to . . .

Federal agencies," noting that concessionaires furnish services to

the public. This language, however, was not incorporated into the

statute. Instead, as noted above, the SCA provides that it applies

to contracts "the principal purpose of which is to furnish services

in the United States through the use of service employees." 41

U.S.C. § 351. 

The Supreme Court instructs that “when the statute's language

is plain, the sole function of the courts -- at least where the

disposition required by the text is not absurd -- is to enforce it

according to its terms.” Lamie v. United States Trustee, 540 U.S.

526, 534 (2004) (citations omitted). Here, the language of the SCA

is plain. Thus, the Court need not, and cannot, rely on the

preamble to interpret the SCA. Price v. Forrest, 173 U.S. 410, 427

(1899); see also Norman J. Singer, Sutherland Stat. Constr. § 47.04

(5th ed. 1992) ("while the preamble of the act can be used for the

purpose of explaining otherwise unclear legislative intent, it does

not control when the statutory language has plain and obvious

meaning").

 Furthermore, Plaintiffs note that the new concession contract,

like the original concession contract, is a "hybrid" contract,

requiring services to be provided to the public and to Defendants. 

For example, Defendant NPS's employees can get to Alcatraz Island

only through the concessionaire's services. Under the current

contract, Blue & Gold Fleet transports Defendant NPS personnel,

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equipment, material, supplies and potable water to the island, and

hauls all sewage and trash from the island. At the hearing,

Defendants stated that the new concession contract requires fewer

such services and that the services provided to Defendant NPS will

be minimal. Regardless, even if Defendants and Intervener are

correct that the SCA applies only to contracts that furnish

services to federal agencies, serious questions exist regarding

whether the SCA applies to the new concession contract.

As noted above, it has been the view of the DOL for over two

decades that the SCA applies to NPS contracts, with limited

exceptions not relevant here. Congress delegated the

responsibility to interpret the SCA to the DOL, not to Defendant

NPS. See Chevron U.S.A, Inc. v. Natural Res. Def. Council, Inc.,

467 U.S. 837, 843-44 (1984) (deference must be given to the agency

to which Congress has delegated the responsibility to interpret the

law and draft regulations pursuant to that law). Thus, it is the

DOL's interpretation of the SCA that is entitled to deference, not

Defendant NPS's. Smith v. City of Jackson, 544 U.S. 228, 125 S.

Ct. 1536, 1558-59 (2005)(O'Connor, J., concurring) (noting that

"Congress has explicitly or implicitly delegated to the agency

responsible for administering a statute the authority to choose

among permissible constructions of ambiguous statutory text" and

applying contradictory interpretations from other agencies would be

contrary to such delegation). Defendants cannot render the SCA

inapplicable to concession contracts by implementing their own

contrary regulation, a "regulation" that the Supreme Court found to

be "nothing more than a 'general statement of policy' designed to

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inform the public of NPS's views." National Park Hospitality Ass'n

v. Dep't of Interior, 538 U.S. 803, 809 (2003)(holding that a

challenge to 36 C.F.R. § 51.3, purporting to render the Contract

Disputes Act of 1978 inapplicable to concession contracts, was not

ripe for judicial resolution).

Considering the plain language of the SCA and deference to

DOL's regulation on the scope of the SCA, the Court finds that it

is likely that Plaintiffs will succeed on the merits in showing

that the SCA applies to the new concession contract.

VI. Imminent and Irreparable Harm 

Plaintiffs list numerous injuries that they and their members

will suffer if an injunction is denied and Defendants award the new

concession contract to Intervener, as planned, on or about May 7,

2006. Plaintiff MP&P states that more than 150 of its members will

lose their jobs without an opportunity to compete for those jobs on

equal footing with non-union employers and their employees. The

new contract will depress wages for union members in the entire

maritime industry in Northern California, undermining the current

level of wages and benefits provided to union members. In

addition, Plaintiff MP&P provides declarations of its members

attesting to the irreparable harm that they and their families will

suffer unless the award of the new concession contract is

preliminary enjoined.

Defendants contend that the only harm to Plaintiffs is

monetary. Without providing any authority, Defendants argue that

such monetary damages will not support injunctive relief. 

Plaintiffs' harm, however, is not measurable entirely in monetary

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terms. As shown in the declarations, Plaintiffs' members face

substantial hardships, including the break-up of families and the

inability to preserve necessary health care; if unable to find

employment with similar wages and benefits, many members may be

forced to leave their homes in the Bay Area. Furthermore, courts

have found the injuries Plaintiffs claim sufficient to warrant a

preliminary injunction. In American Maritime Officers v. Hart,

1999 WL 33839612, *5 (D. D.C. 1999), the court granted the

plaintiff union's motion for preliminary injunction and enjoined a

federal agency from awarding a contract pursuant to a solicitation

that failed to comply with the SCA. In Whelan v. Colgan, 602 F.2d

1060, 1062 (2d Cir. 1979), the court found that "the threatened

termination of benefits such as medical coverage for workers and

their families obviously raised the spectre of irreparable injury." 

See also Roe v. Anderson, 966 F. Supp. 977, 985 (E.D. Cal. 1997)

(finding irreparable harm where enforcement of law made it

impossible to find affordable housing in California).

Intervener does not attest to any harm it will suffer. 

Defendants assert that delay and uncertainty may cause difficulties

for Intervener. But, as Plaintiffs note, the absence of any claim

of harm by Intervener itself undermines that assertion. Plaintiffs

further note that there is no compelling urgency to award the new

concession contract. The solicitation for the contract has been

pending since June 27, 2004, and Defendants twice extended the

deadline for submission of proposals. Furthermore, Blue & Gold

Fleet is willing to continue under the original concession contract

as long as necessary; service to Alcatraz would not be interrupted

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if the Court were to grant a preliminary injunction.

Absent the injunction Plaintiff MP&P seeks, Plaintiffs'

members likely will be imminently and irreparably harmed. Absent

the broader injunction sought by Plaintiff IBU, harm is not

imminent. Plaintiff IBU cites no other concession contract for

transportation services that is on the verge of being awarded. Its

only members in imminent danger of losing their jobs, health care

and homes are those members currently working for Blue & Gold

Fleet; any immediate and irreparable harm to those members would be

addressed by enjoining only the new concession contract.

VII. Public Interest

The parties note that, in ruling on a preliminary injunction,

courts consider "whether the public interest will be advanced by

granting the preliminary relief." Overstreet v. United Bhd. of

Carpenters and Joiners of Am., Local Union No. 1506, 409 F.3d 1199,

1207 (9th Cir. 2005). Plaintiffs contend that, here, the public

interest would be advanced by the preliminary injunctions. They

note that the SCA furthers a compelling public interest in

protecting wages and benefits of service contract employees and

ensuring “that the Federal Government shall not be a party to the

depressing of labor standards in any area of the nation.” AFGE,

561 F.2d at 1312 (quoting 11 Cong. Rec. 24387, 1965, Cong. O'Hara,

co-author of the SCA). They further note that there is a strong

public interest in ensuring that federal agencies comply with

federal law.

Intervener and Defendants do not address the public interests

Plaintiffs cite. Instead, Intervener responds that the public's

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interest is in uninterrupted service to Alcatraz Island,

particularly during the peak summer tourist season, and that an

injunction would impede this interest. According to Intervener, if

the Court grants this injunction, Defendants will be forced to

scramble to find alternative services. But, as noted above, the

incumbent contractor, Blue & Gold Fleet, has expressed its

willingness to continue providing ferry services to Alcatraz. 

Defendants respond that, if they are enjoined, the public and the

park will be denied the benefits described in Intervener's

proposal. Neither Defendants nor Intervener, however, offer any

evidence of potential harm to the park or public. Nor do they

state what benefits to the public will be denied. 

Although it is not clear that the public interest will be

advanced by granting Plaintiffs' preliminary injunctions, neither

does it appear that the public interest will be harmed.

CONCLUSION

For the foregoing reasons, during the pendency of this

litigation, Defendants are enjoined from awarding a contract, for

the continuation of water transportation services between the City

of San Francisco, California and Alcatraz Island and related

services, that permits any contractor or subcontractor under it to

pay its employees providing services under such contract less than

the wages and fringe benefits specified in Plaintiffs' collective

bargaining agreements with Blue & Gold Fleet, LLP, including any

prospective increases in wages and fringe benefits specified in

such collective bargaining agreements. As explained in the Court's

May 1, 2006 order, this injunction does not prevent a contractor or

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subcontractor from seeking a variance from the Department of Labor. 

If a variance is granted, Defendants may move to vacate the

preliminary injunction. 

This case is stayed pending the Department of Labor's

determination of whether the SCA applies to the concession contract

at issue. The parties shall notify the Court immediately of such a

determination, and of any Federal Circuit ruling. A case

management conference is scheduled for September 8, 2006 at 1:30

p.m., but this date may be continued by stipulation. 

IT IS SO ORDERED.

Dated: 5/26/06

 

CLAUDIA WILKEN

United States District Judge

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