Opinion ID: 785675
Heading Depth: 4
Heading Rank: 3

Heading: Other liberty interests

Text: 55 Additionally, Plaintiffs attempt to assert multiple liberty interests, in asserting a deprivation of freedom from interference to operate their business, perform their HCR contracts, and to make business decisions concerning the terms and conditions of the purchase of supplies such as fuel. 14 Plaintiffs freedom from interference... and to make business decisions is not rooted in contract. It is possible that Plaintiffs bargained away the freedoms being claimed, but again that is merely a rebuttal point. Commercial Drapery Contractors, 133 F.3d at 4; Megapulse, 672 F.2d at 968. 56 The only rights asserted in this cause of action that are based upon contractual sources are Plaintiffs' rights to perform their HCR contracts. The HCR contracts are the original contracts between Plaintiffs and Defendant as they existed prior to Amendment 3 — here, Plaintiffs assert that subsequent acts by the USPS breached that contract. Clearly, a claim to enforce the original contracts is grounded in rights whose source is contractual — this claim is identical to the attempt to enforce the original contract (by requesting specific performance) in Ingersoll-Rand, where the plaintiff sought declaratory and injunctive relief to prevent the Air Force from soliciting new bids in a process that would replace the plaintiff's contract. 780 F.2d at 79-80. That this claim is based on a contract is clear from the fact that the very rights at stake can only be identified with reference to the HCR contracts. As in Ingersoll-Rand, the relief requested here is specific performance of the original contract. The claim of a right to perform HCR contracts is essentially contractual. This claim provides a striking contrast to all of the other claims in this case, which are not based on rights found in a contract and which do not seek contractual relief, in the form of specific performance (or money damages). 57 The contractual claim for performance of HCR contracts does not pollute the non-contractual assertions of Fifth Amendment rights. It would be absurd to characterize Plaintiffs' entire first cause of action as one claim. The first cause of action contains three sub-parts. Hence, it is likely that there are at least three claims under this cause of action, and in fact there are probably even more, since one of the sub-parts (asserting, inter alia, the HCR contract argument) asserts numerous legal rights. The definition of a claim, within the CDA context, comes from the RMI Titanium/ Megapulse test a claim is distinct if it is founded upon distinct legal rights. In stating that the characterization of a claim as essentially contractual depends on the source of the rights upon which the plaintiff bases its claim, 15 RMI Titanium indicated that claims are defined by their underlying rights; thus, by definition, in CDA analysis, an assertion of non-contractual legal rights would be a distinct claim from an assertion of contractual legal rights. See also Black's Law Dictionary 240 (7th ed.1999) (one definition of a claim is the assertion of an existing right). (If, arguendo, the entire first cause of action were somehow viewed as a single claim, then it is doubtful that there would be a valid basis for dismissing the entire claim, on the basis of the small part of the claim that is based upon the rights in the HCR contracts. This question, though, need not be considered.) 58 The rights upon which Plaintiffs base their claims are not contractual with respect to any Fifth Amendment claim other than the claim of liberty to perform HCR contracts. 59 2. Plaintiffs' claim for declaratory and injunctive relief for violation of postal regulations 60 Plaintiffs' second cause of action is the claim that Defendant has violated its own regulations. Plaintiffs state that regulations forbid the USPS from limiting Plaintiffs' freedom to purchase fuel from any source that Plaintiffs wish. Plaintiffs cite a regulation that [t]he postal service is not permitted to tell a contractor how or when to purchase supplies.... (J.A. at 209) (quoting USPS Management Instruction PO-530-97-1). Plaintiffs also cite a regulation that [p]urchases of fuel may be made from any source at the option of the contractor. (J.A. at 216) (quoting USPS Management Instruction PO-530-97-1). 61 On the merits, a question arises as to whether these regulations vest private rights of action to enforce the regulations. The question is whether mail transporters (Plaintiffs) and/or fuel suppliers (e.g., those other than Exxon-Mobil and BP Amoco) have the right to sue to force the USPS to comply with the regulations. 16 But this question is not relevant to a ruling on jurisdiction. The essentially contractual test of RMI Titanium, from Megapulse, examines the source of the rights upon which the plaintiff bases its claim, without requiring that those claimed rights even exist. If the rights do not exist, then the court will grant a motion to dismiss for failure to state a claim but the court will not deny its jurisdiction over the claim. 62 The district court and Defendant attempt to deem this claim contractual, by likening it to Ingersoll-Rand. In Ingersoll-Rand, the named plaintiff alleg[ed] that the government's decision to terminate I-R's contract to supply air compressors and to resolicit bids for the contract was ... contrary to several federal acquisition regulations. 780 F.2d at 74. Yet Ingersoll-Rand does not govern the present case. In Ingersoll-Rand, the court, in addition to classifying the relief sought as contractual, offered three reasons for ruling that the source of the rights in the claim for violation of regulations was contractual. The court stated: 63 First, it is possible to conceive of this dispute as entirely contained within the terms of the contract. The contract included a termination-for-convenience clause.... 64 Second, the issues raised by plaintiff's complaint are within the unique expertise of the Court of Claims. The substance of I-R's complaint is that the Air Force had no good reason to terminate the contract and begin resolicitation. This complaint, unlike a complaint based, for example, on a violation of the civil rights of the contractor, calls for knowledge of the government contracting process.... 65 Finally, despite I-R's characterization, see Br. for Appellant at 34, we find that I-R is not a frustrated bidder. I-R asserts that its action is no different from a bid protest action. See Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App. D.C. 371, 424 F.2d 859 (D.C.Cir.1970). 66 Id. at 78. None of these three reasons prove controlling in the present case. 67 Setting aside the first reason momentarily, it is clear that the other two reasons do not apply to the present dispute. The second reason from Ingersoll-Rand is not applicable to the present dispute, because Plaintiffs claim in the present case does not relate to the contracting process. Ingersoll-Rand was a case involving the rules and process of competitive bidding for the awarding of government contracts. Id. at 75. The present case does not involve the awarding of contracts among competitors; thus, the third reason in Ingersoll-Rand clearly does not apply to the present case, which does not involve a frustrated bidder. 68 The first reason given in Ingersoll-Rand might apply to the present case: by signing Amendment 3, Plaintiffs might have contractually waived any rights that vested under the regulations. Nonetheless, the present dispute is not governed by Ingersoll-Rand. It appears that the D.C. Circuit's first reason for ruling that the source of the rights was contractual never was good law within that circuit. In ruling that the source of the rights in the claim was contractual because it is possible to conceive of this dispute as entirely contained within the terms of the contract, the D.C. Circuit classified the claim on the basis of a rebuttal point embedded within a larger claim — the D.C. Circuit thus ran afoul of the principle that the mere existence of a contract issue within a broader claim does not make the claim essentially contractual, where the source of the rights claimed and the remedies are not contractual. Commercial Drapery Contractors, 133 F.3d at 4; Megapulse, 672 F.2d at 968. Since the within the terms of the contract point in Ingersoll-Rand, a 1985 opinion, is contrary to the same circuit's 1982 ruling in Megapulse (and the same circuit's 1998 ruling in Commercial Drapery Contractors ), it appears that this point from Ingersoll-Rand never was good law in the D.C. Circuit. 17 69 Moreover, even if the within the terms of the contract point were good law, this one similarity is not enough to make the present dispute similar to Ingersoll-Rand. As discussed above, the D.C. Circuit's second and third reasons given for determining the source of the Ingersoll-Rand claim to be contractual are not applicable to the present dispute. Also, as discussed above, the Ingersoll-Rand court ruled that the relief sought was specific performance, a contractual remedy — the relief issue alone is sufficient to distinguish Ingersoll-Rand from the present case. Finally, the many differences between the present case and Ingersoll-Rand are quite important — Ingersoll-Rand itself stressed the case-specific nature of the CDA inquiry. 780 F.2d at 76-77 (As to whether the relief sought was essentially contractual, the [ Megapulse ] court recognized that the question `may be resolved only against the facts of each case.' [ Megapulse, 672 F.2d] at 970.). 70 The claim for violation of postal regulations is not a claim relating to a contract, under the CDA, but rather is a claim based upon rights established in government regulations. The claim is analogous to that in Commercial Drapery Contractors, where the CDA did not bar jurisdiction over the plaintiffs' claims that GSA's cancellation and suspension decisions violated multiple government procurement statutes and regulations. 133 F.3d at 3. 71 This claim should be decided on the merits. If the regulations do not vest any rights in mail transporters, then the district court should grant a motion to dismiss this claim. But if a regulation does vest a right of action in the mail transporters, then the source of this right is the regulation, notwithstanding that a contract issue arises in rebuttal. Ingersoll-Rand is not controlling, and there is no other valid argument for classifying the rights found in the regulation as contractual. 72 3. Plaintiffs' claim for declaratory and injunctive relief for arbitrary agency action without statutory authority 73 Plaintiffs' third cause of action is the claim that the Exxon contracts created third-party obligations, obligating Plaintiffs to certain fuel supply provisions, and that because the USPS lacks statutory authority to obligate third parties, such obligations were arbitrary and capricious. Plaintiffs assert that arbitrary and capricious action violates due process. Tolchin v. Supreme Court, 111 F.3d 1099, 1115 (3rd Cir.1997) (Due process may also be violated if the government acts arbitrarily or capriciously. Grayned, 408 U.S. at 109, 92 S.Ct. 2294.). Plaintiffs assert irreparable harm. 74 Nothing in this claim relates to the contractual relationship between Plaintiffs. The claim itself is structured and argued such that it would be the same if, hypothetically, Plaintiffs had no contractual relationship with the USPS: i.e., if, hypothetically, the USPS attempted to obligate all gas stations to give discounts to mail transporters, and gas stations had no contractual relationship with the USPS, then the gas stations could assert the exact same legal rights. 75 The source of the rights in this claim is not distinguishable from the source of rights in claims over which the CDA did not bar jurisdiction in Commercial Drapery Contractors. 133 F.3d at 3 (holding that the CDA did not bar jurisdiction over the plaintiffs' claims that GSA's cancellation and suspension decisions ... constituted `de facto debarment' or `blacklisting,' thereby depriving them of due process.). 76 On the merits, contract issues certainly may be relevant: Plaintiffs' contracts with the USPS may be considered in determining disputed factual issues concerning whether Plaintiffs agreed to abide by the Exxon contracts. But the contract issues would arise only in rebuttal, not in setting forth the source of rights upon which Plaintiffs base their claims. Again, the existence of contract issues as rebuttal points does not change the nature of the source of the rights claimed. Commercial Drapery Contractors, 133 F.3d at 4; Megapulse, 672 F.2d at 968.