# In the United States Court of Federal Claims

No s . 19

- 308C

, 19

- 331C , 19

- 372C , 19

- 441C , 19

- 472C , 19

- 478C (consolidated) (Filed: April 24 , 2019 )

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Motion for Preliminary Injunction; Likelihood of Success on the Merits; Irreparable Harm; Balance of Hardships; Public Interest; 28 U.S.C. § 1491(b); RCFC 65(d) ; Preserve Status Quo; Court’s Ability to Grant Meaningful Relief

. *

FMS INVESTMENT CORP.

, et al.

, *

* Plaintiff, *

*

v. *

* UNITED STATES, *

* Defendant, *

*

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David R. Johnson , with whom were Tyler E. Robinson and Ryan D. Stalnaker , Vinson &

Elkins LLP , Washington, DC, fo r Plai ntiff FMS Investment Corp

.

Todd J. Canni , with whom were Richard B. Oliver

, Alexander B. Ginsberg

, J. Matthew

Carter

, Aaron S. Ralph , and Kevin R. Massuodi , Pillsbury Winthrop Shaw Pittman LLP, Los Angeles, California, for Plaintiff Continental Service Group, Inc.

Townsend L. Bourne , with whom were Jonathan S. Aronie and Shaunna Bailey , Sheppard Mullin, Richter, & Hampton LLP, Washington

, DC, for Plaintiff Account Control Technology, Inc.

William M. Jack , with whom were William MacLeod

, David E. Frulla

, Amba M. Datta

, and Elizabeth C. Johnson , Kelley Drye & Warren LLP, Washington, DC , for Plaintiff GC Services Limited Partnership

.

Davi d T. Ralston

, Jr.

, with whom were Frank S. Murray

, Micah T. Zomer , and Krista A.

Nunez , Foley & Lardner LLP, Washington, DC, for Plaintiff Windham Professionals, Inc.

David R. Pehlke and Alexis J. Echols

, Trial Attorneys, with whom were Jana Moses

, Trial Attorney, Joseph H. Hunt , Assistant Attorney General

, Robert E. Kirschman, Jr. , Director, Patricia M. McCarthy , Assistant Director , Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC

, as well as Tracey Sasser , Assistant General Counsel, Division of Business and Administrative Law, U.S Department of Education, Washington, DC, for Defendant.2

OPINION AND ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION

WHEELER, Judge.

Once again, this Court must decide whether a group of p laintiff Private Collection Agencies (“PCAs”) are entitled to a preliminary injunction forcing the Department of Education (“ED”) to buy more of the PCAs’ defaulted student debt collection services unt il

this Court resolves their challenge to ED’s latest attempt to procure integrated student loan

administration and collection services.

The PCAs are currently servicing student loan accounts for ED under Award Term Extensions (“ATEs” ) that will expire on April 21, 2019

. T he PCA s ask this Court to (i )

order ED to ex tend their contracts until this protest is resolved and ED makes a lawful

contract award for defaulted student debt collection services and (ii ) bar ED from recalling the accounts that the PCAs currently service

. For the reasons below, the PCAs’ motions

for a preliminary injunction are DENIED.

Background

The PCAs’ motion s arise from a series of bid protests involving ED solicitations for

defaulted student debt collection services and other student loan administration services

. I n 2015, ED issued a n initial solicit ation for defaulted student debt collection services . A cycle of contract awards, p rotests (including this one) , corrective actions, a nd court

decisions ensu ed, which h ave prevented ED from making and executing a contract award

.

In 2017, ED began working to integrate defaulted student debt collection services

with other student lo an administration services, a ccording to a plan it dubbed “NextGen

. ” ED planned to procure all of the services necessary to administer and collect on its student loan portfolio through a single NextGen procurement. See FMS Inv. Corp. v. United

States , 139 Fed. Cl. 221 (2018) clarified by 139 Fed. Cl. 439. In May 2018 , ED cancelled

the 2015 PCA solicitation

, claiming that NextGen would make the PCA procurement superfluous. Id. In September 2018, t his Court enjoined the cancellation as insufficiently supported by the administrative record

. Id.

In October 2018, a group of PCAs filed protests in this Court ch allenging ED’s

NextGen solicitation

, arguing that , after the Court’s September injunction, ED improperly

shoehorn ed defaulted student debt collecti on services into Phase II of the NextGen procurement after already downselecting offerors from Phase I

. See Navient Solutions,

LLC , et al., v. United States

, 141 Fed. Cl. 181, 182

- 83 (2018).

In December 2018, ED dec ided to take corrective action to address the protest grounds , but FMS Inves tment Corp. (“FMS”) ( which was a lso a plaintiff in that protest)

still asked this Court for a preliminary injunction preventing its ATE from ending in April3

2019 and ordering ED to give it more accounts to service. Id. at 182. This Court denied

the motion

, reasoning that granting FMS’ s requested relief would go beyond preser ving the status q uo that existed before the litigation began and would provide a remedy exceeding the scope of relief a vailable to FMS upon final judg ment

. Id. at 184

- 85.

In January 2019

, ED completed its corrective action a nd reissued three separate

Next Gen solicitations , including one calling for proposals on defaulted debt collection

work

. Inevitably, a group of PCAs challenged the three solicitations (the current protest) alleging, among other defects, illegal bundling of defaulted debt collection services with

other student loan administration services

. On March 6, 2019 , ED cancelled the 2015 PCA

solicitation

— again

— and the protesters modified their claims to allege that ED’ s second attempt to cancel that procurement is also illegal.

Five PCAs filed motions for a preliminary injunction

. The PCAs claim that they will suffer irreparable harm if their ATEs end, as scheduled

, on April 21, 2019, while their protests are pending. The Government re sponds that the PCAs are unlikely to win on the

merits and that the Court lacks jur isdiction to enjoin the ATEs from expiring because they

lack a sufficient nexus to the underlying protest.

Analysis

This Court has broad authority to order injunctive relief in bid protest cases

. See 28 U.S.C. § 1491(b ). But a “ preliminary injunction is an extraordinary and drastic remedy” that is not “routinely granted.” Akal Sec., Inc. v. United States , 87 Fed. Cl. 311, 316 (2009).

In deciding whether to grant a preliminary injunction, the Court weighs four factors: (1) the likelihood of plaintiff’s success on the merits; (2) the prospect of irreparable harm to the plaintiff in the absence of injunctive relief; (3) the balance of hardships; and (4) the public interest. KWV, Inc. v. United States , 108 Fed. Cl. 448, 455 (2013)

.

A court usually issues a preliminary injunction to preserve the status quo that exi sted before the litigation began until the court can make a final decision on the merits

. Cont’l Serv. Grp., Inc. v. United States , 722 Fed. App’x 986 , 994 (Fed. Cir. 2018) (citing Litton Sys., Inc. v. Sunstrand Corp. , 750 F.2d 952 , 961 (Fed. Cir. 1984)). A court may also issue a preli minary injunction to preserve the court’s abili ty to grant meaningful relief upon reaching a final decision

. See i d. at 99 5 (citing 11A Wright & Miller, Fed. Practice and

Procedure § 2948 3d ed . 1998 ). Preliminary injunctions can compel affirmative acts if necessary to achieve either end

. See

, e.g.
, id. (citing 11A Wright & Miller § 2948) ; Canal Auth. of State of Fla. v. Callaway , 489 F.2d 567, 576 (5th Cir. 1974) (citations omitted)

.

The PCAs ask this Court to (i ) order ED to extend their contracts until the protest is

resolved and ED makes a lawful contract award for defaulted student debt collection services and (ii) bar ED from recalling the accounts that the PCAs currently service. This

relief would serve nei ther valid purpose for granting a preliminary injunction.4

When the litigation began, ED was free to let the PCAs’ ATEs expire on April 21,

2019. That is still the case. O rdering ED to f u nnel more business to the PCAs

— a n option
committed to ED’s discretion under the ATEs ’ terms

— merely because the PCAs are protesting a different ED solicitation to procure defaulted student debt collection services

, would alter the status quo, not preserve it

. See Cont’l Serv. Grp

. , Inc. , 722 Fed. App’ x at
994 ; Navient Solutions, LLC, et al. , 141 Fed. Cl. at 184

- 85

.

A preliminary injunction is also unnecessary to preserv e the Court’s ability to grant meaningful relief in the underlying protest

. If the PCAs succeed on the merits, d enying

the motions for preliminary injunction here will have no impact on the Court’s power to enjoin ED from cancelling the PCA solicitation and moving ahead with the NextGen

solicitations. This is the case because the PCAs’ claimed irreparable harm of going out of

business ar ises from the ATEs expiring , not the underlying protest grounds

.

T he PCAs also argue that this Court can provide the relief they request because “ED has abandoned any pretense of conducting the PCA solicitation in good faith

. ” FMS Reply

at 5

- 6 ( citing Cont’l Serv. Grp. , 722 Fed. App’x at 995

- 96 (finding no evidence of bad faith in ED’s conduct of the procurement at issue)). Agency bad faith can be evidence of likelihood of success on the merits of the underlying protest, but it cannot expand the

Court’ s power to grant injunctive relief. R egardless, the PCAs’ requested relief has nothing

to do with the performance and expiration of the ATEs according to their terms, or with the relief the PCAs would be entitled to if they won the underlying protest

.

Conclusion

Applying the above analysis to the four

- factor test

, the Court concludes that (1) the PCAs’ likelihood of success on the merits of the underlying protest is irrelevant to the preliminary relief that they seek , and (2) the PCAs’ claimed irreparable harm does not stem from the lack of injunctive relief, but from their ATEs in a different pr ocurement expiring as scheduled. Thus, factors (1) and (2) wholly favor the Government, and the Court need not address factors (3 ) and (4).

As this Court previously noted , “ [the PCAs] chose to depe nd upon ED contracts to
survive.” Navient Solutions, LLC

, 141 Fed. Cl. 181, 185 (2018). “The Court’s power to issue a preliminary injunction does not exist to remedy ” harm arising from the PCAs’ own business decisions. Id. T he Plaintiffs’ motion s for a preliminary injunction are DENIED.

IT IS SO ORDERED.

s/ Thomas C. Wheeler

THOMAS C. WHEELER Judge