Court Opinion

ID: 4662157
Source: CourtListenerOpinion
Date Created: 2021-02-23 17:03:31.877566+00
Date Added: 2024-06-11T08:02:18.854618
License: Public Domain

In the United States Court of Federal Claims
                                           No. 20-413C

                                 (E-Filed: February 23, 2021) 1

                                                 )
CLARKE HEALTH CARE                               )
PRODUCTS, INC.,                                  )
                                                 )
               Plaintiff,                        )
                                                 )
v.                                               )
                                                 )
THE UNITED STATES,                               )
                                                 )
               Defendant,                        )
                                                 )
and                                                     Motion for Reconsideration; RCFC
                                                 )
                                                        59(a); Scope of Remand; Limited
                                                 )
ARMSTRONG MEDICAL SUPPLY                                Remand.
                                                 )
GROUP, LLC,                                      )
                                                 )
                Intervenor-defendant,            )
                                                 )
and                                              )
                                                 )
CONGRESSIONAL MEDICAL                            )
SUPPLY, LLC,                                     )
                                                 )
               Intervenor-defendant.             )
                                                 )

Julie M. Nichols, McLean, VA, for plaintiff. James S. Phillips, of counsel.

Joshua A. Mandlebaum, Trial Attorney, with whom were Jeffrey Bossert Clark, Acting
Assistant Attorney General, Robert E. Kirschman, Jr., Director, and L. Misha Preheim,
1
        This opinion was issued under seal on January 28, 2021. See ECF No. 57. Pursuant to
¶ 2 of the ordering language, the parties were invited to identify proprietary or confidential
material subject to deletion on the basis that the material was protected/privileged. See id. at 7.
No redactions were proposed by the parties. See ECF No. 60 (notice). Thus, the sealed and
public versions of this opinion are identical, except for the publication date and this footnote.
Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, DC, for defendant. Jason A.M. Fragoso, United
States Department of Veterans Affairs, of counsel.

Jon W. Burd, Washington, DC, for intervenor-defendants. Kendra P. Norwood and
Nicole E. Giles, of counsel.

                                           OPINION

CAMPBELL-SMITH, Judge.

       On November 18, 2020, defendant filed a motion for reconsideration of the court’s
October 26, 2020 order clarifying the scope of the court’s remand of this matter to the
United States Department of Veterans Affairs (VA). See ECF No. 49. Plaintiff and
intervenor-defendants filed responses on December 10, 2020, 2 see ECF No. 53
(intervenor-defendants’ joint response), ECF No. 54 (plaintiff’s response), and defendant
replied on December 17, 2020, see ECF No. 55. The motion is now fully briefed and ripe
for decision.

      The court has considered all of the arguments presented by the parties and
addresses the issues that are pertinent to the court’s ruling in this opinion. For the
reasons set forth below, defendant’s motion for reconsideration is DENIED.

I.     Background

        Plaintiff filed this bid protest on April 10, 2020, challenging the corrective action
taken by the VA after protests were filed by intervenor-defendants at the United States
Government Accountability Office (GAO) challenging the agency’s contract award to
plaintiff. See ECF No. 1. On August 5, 2020, because it could not find any evidence in
the administrative record setting forth the basis of the VA’s decision to take corrective
action, the court issued an opinion denying the parties’ cross-motions for judgment on the
administrative record and remanding this matter to the VA “so that the agency may
address the grounds for the corrective action taken during the procurement at issue in this
matter.” ECF No. 39 at 9 (public opinion).

        Plaintiff subsequently moved for clarification of the remand on September 23,
2020, citing a difference in opinion between the parties as to the scope of the remand.
See ECF No. 41 at 2. Plaintiff understood the court to be requiring the agency to review
its records and determine whether it had any evidence explaining the corrective action

2
        The court ordered plaintiff to file a response to defendant’s motion. See ECF No. 51
(order). Rule 59(f) of the Rules of the United States Court of Federal Claims (RCFC) only
requires a response if ordered by the court; although the court did not order responses from the
intervenor-defendants, the court has considered their joint response, ECF No. 53, in its ruling.
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that could be provided to the court. See id. Defendant, on the other hand, understood the
scope of the remand to be for the purpose of allowing the VA to “reach a new decision
and provide a contemporaneous written explanation of the basis for that decision.” ECF
No. 46 at 1. Defendant further stated that the VA’s new decision could be “essentially
the same as, similar to, or different from the earlier decision challenged by [plaintiff].”
Id.

        The court, on October 26, 2020, issued an order granting plaintiff’s motion and
clarifying that the remand was for the limited purpose of permitting the VA to “identify
any documents or materials that were prepared prior to the corrective action that would
have informed the agency’s decision-making process.” ECF No. 48 at 2. The court
further noted that defendant was not permitted pursuant to the remand to “seek a new
decision at the VA, nor would such an action be appropriate.” Id. Defendant has now
moved for reconsideration of the court’s order clarifying the remand. See ECF No. 49.

II.    Legal Standards

        Rule 59(a) of the Rules of the United States Court of Federal Claims (RCFC)
governs a motion for reconsideration. 3 Rule 59(a)(1) provides that rehearing or
reconsideration may be granted: “(A) for any reason for which a new trial has heretofore
been granted in an action at law in federal court; (B) for any reason for which a rehearing
has heretofore been granted in a suit in equity in federal court; or (C) upon the showing
of satisfactory evidence, cumulative or otherwise, that any fraud, wrong, or injustice has
been done to the United States.” RCFC 59(a)(1). Thus, the court, “in its discretion, ‘may
grant a motion for reconsideration when there has been an intervening change in the
controlling law, newly discovered evidence, or a need to correct clear factual or legal
error or prevent manifest injustice.’” Biery v. United States, 818 F.3d 704, 711 (Fed.
Cir.), cert. denied, 137 S. Ct. 389 (2016) (quoting Young v. United States, 94 Fed. Cl.
671, 674 (2010)). “A motion for reconsideration must also be supported ‘by a showing

3
        Defendant argues in its reply that the court should consider its motion “pursuant to Rules
54(b) and 59(a) . . . rather than RCFC 59(e).” ECF No. 55 at 2. Defendant notes that the
standard under these rules is “less rigorous” and “amounts to determining, within the [c]ourt’s
discretion, whether reconsideration is necessary under the relevant circumstances.” Id. at 2-3
(quoting Loveridge v. United States, 150 Fed. Cl. 123, 126 (2020)). In the court’s view, the
language of RCFC 54(b) and the caselaw applying that rule to guide reconsideration of non-final
orders that adjudicate less than all of the parties’ claims indicate that RCFC 54(b) is intended to
govern only matters in cases in which the entry of a partial judgment is, or would be, appropriate.
See BHB Ltd. P’ship v. United States, No. 19-1610, 2021 WL 222815 (Jan. 22, 2021) (denying
motion for reconsideration and analyzing the application of the RCFC 54(b) and 59(a) standard
to non-final orders). Thus, because the court’s order clarifying its remand was a case
management order, and not one for which entry of partial judgment was appropriate, the court
applies the standard articulated under RCFC 59(a).
                                                3
of extraordinary circumstances which justify relief.’” Id. (quoting Caldwell v. United
States, 391 F.3d 1226, 1235 (Fed. Cir. 2004)).

III.   Analysis

       A.     Defendant’s Motion for Reconsideration

       In its motion for reconsideration, defendant argues that the court’s order “appears
inconsistent with recent precedent from the United States Supreme Court” that permits an
agency to provide a “newly-created explanation of its prior decision” or to “mak[e] a new
decision” on remand. Id. at 1, 4 (citing Dep’t of Homeland Sec. v. Regents of the Univ.
Cal., 140 S. Ct. 1891 (2020)).

        Plaintiff responds by first noting that defendant’s motion does not meet the legal
standard for reconsideration because the caselaw cited by defendant was decided well
before the parties briefed plaintiff’s motion to clarify and defendant simply failed to
include the caselaw in its briefing. See ECF No. 54 at 3-4. Plaintiff goes on to argue that
this case is distinguishable from the Regents case because it is a bid protest case and must
be decided under the Tucker Act, 28 U.S.C. § 1491, rather than under the Administrative
Procedures Act (APA), 5 U.S.C. § 551. See id. at 5-8. Further, plaintiff contends, even if
Regents applies, it does not permit the agency to create a new explanation for its action
and does not justify permitting the agency to take new corrective action. See id. at 8-10.

       Defendant replies that “justice requires reconsideration” because it “had little or
no opportunity to bring Regents to the Court’s attention earlier” given that it had only
two business days to respond to plaintiff’s motion. ECF No. 55 at 3. And, it is the APA
standards that apply, even in bid protest cases, defendant argues. See id. at 4. Therefore,
defendant reasons, Regents applies. See id. Defendant further contends that, because the
United States Court of Appeals for the District of Columbia has interpreted Regents as
permitting an agency to make a “‘fuller explanation of the agency’s reasoning’” when the
record is devoid of reasoning for a decision, id. at 5 (quoting Bhd. of Locomotive Eng’rs
& Trainmen v. Fed. R.R. Admin., 972 F.3d 83, 117 (D.C. Cir. 2020), the court here
should permit the VA to provide a new explanation “elaborating on the reasoning in [the]
VA’s April 2, 2020 memorandum,” id. at 5-7.

       B.     Reconsideration Is Not Warranted

        Here, as plaintiff asserts, the caselaw and argument defendant puts forth does not
amount to an intervening change in the controlling law, newly discovered evidence, or a
clear factual or legal error that requires correction. See id. at 711. The Supreme Court
issued its decision in Regents on June 18, 2020—well before plaintiff’s motion for
clarification was filed on September 23, 2020. See Regents, 140 S. Ct. at 1891.
Therefore, the case is not an intervening change in the controlling law. Nor does
defendant assert any new facts in its motion. See generally ECF No. 49. Thus, to justify

                                             4
reconsideration, the court must need to correct a clear factual or legal error. Biery, 818
F.3d at 711. The precedent in the Regents case, however, does not demonstrate that the
court made a clear legal error sufficient to warrant reconsideration.

       In Regents, the Supreme Court notes that when the grounds for agency action are
inadequate, the court “may remand for the agency to do one of two things: First, the
agency can offer ‘a fuller explanation of the agency’s reasoning at the time of the agency
action.’” Regents, 140 S. Ct. at 1907 (quoting Pension Benefit Guar. Corp. v. LTV
Corp., 496 U.S. 633, 654 (1990)) (emphasis in original). “Alternatively, the agency can
‘deal with the problem afresh’ by taking new agency action.” Id. at 1908 (quoting Sec. &
Exch. Comm’n v. Chenery Corp., 332 U.S. 194, 201 (1947)) (emphasis in original). The
Supreme Court also discussed two important limitations on the agency action: (1) “When
an agency’s initial explanation ‘indicate[s] the determinative reason for the final action
taken,’ the agency may elaborate later on that reason (or reasons) but may not provide
new ones,” id. (quoting Camp v. Pitts, 411 U.S. 138, 143 (1973)); 4 and (2) an agency
making a new determination “is not limited to its prior reasons, but must comply with the
procedural requirements for new agency action.” Id. The Supreme Court analyzed the
Department of Homeland Security’s memorandum which set forth the reasons the agency
took particular action and, based on the principles articulated above, determined that the
offered explanation included “impermissible post hoc rationalizations” and could not be
considered. Id. at 1909.

       The remand in this bid protest case was a limited one for the purpose of
determining whether the agency had omitted from the administrative record any relevant
materials explaining its decision-making process with regard to the corrective action at
issue. Because the court had concluded that the only explanation provided in the record
was an impermissible post hoc rationalization, see ECF No. 39 at 8, defendant’s reliance
on Regents is misplaced. Any elaboration here, such as was sought in Regents, would be

4
        Defendant also cited Brotherhood of Locomotive Engineers and Trainmen v. Federal
Railroad Administration, 972 F.3d 83 (D.C. Cir. 2020), in support of its argument that a new
explanation is proper where the record was devoid of explanation for the agency’s action. See
ECF No. 49 at 3-4. In that case, however, the United States Court of Appeals for the District of
Columbia found that the agency’s “wholly unexplained approval of material decisions . . . was
arbitrary and capricious,” noting that what the Court “confront[ed] in this case is a total
explanatory void.” Bhd. of Locomotive Eng’r & Trainmen, 972 F.3d at 88, 117. The court,
therefore, vacated the decision and then remanded it to the agency for action consistent with the
remand actions described in Dep’t of Homeland Sec. v. Regents of the Univ. Cal., 140 S. Ct.
1891 (2020). See id. at 117. In the court’s view, this case does not support defendant’s
argument. Rather, it supports the proposition that, in the face of a “total explanatory void” such
as the one here, the proper finding is that the agency’s action was arbitrary and capricious, and
the proper remedy is vacatur of that action. Id.
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more impermissible post hoc rationalization as it would amount to an entirely new
explanation. See Regents, 140 S. Ct. at 1909.

       Although the court in Regents notes that courts are permitted to remand a matter
for a new decision, it does not require courts to do so. See id. at 1907 (stating that the
court “may remand for the agency to do one of two things”) (emphasis added). When an
agency “seeks to defend its decision on grounds not previously articulated by the
agency,” the court “generally decline[s] to consider the agency’s new justification” and
“affirm[s] or reverse[s].” SKF USA, Inc. v. United States, 254 F.3d 1022, 1028 (Fed.
Cir. 2001) (citing Chenery, 332 U.S. at 196; Koyo Seiko Co., Ltd. v. United States, 95
F.3d 1094, 1099-102 (Fed. Cir. 1996)). However, “the agency may request a remand
(without confessing error) in order to reconsider its previous position,” which the court
may grant if the “agency’s concern is substantial and legitimate,” rather than “frivolous
or in bad faith.” Id. at 1029. Thus, not only is an agency not guaranteed a remand to
make a new decision, but such a remand would be inappropriate if the agency’s concern
were “frivolous or in bad faith.” Id.; see also 28 U.S.C. § 1491(a)(2) (permitting the
court to remand matters “with such direction as it may deem proper and just”). Allowing
the agency to render a new decision that might be “essentially the same as, similar to, or
different from the earlier decision challenged by [plaintiff],” ECF No. 46 at 1, would
permit the agency to effect an end-run around the bar against post hoc rationalizations. In
the court’s view, such an action would be ill-considered.

       Because the court’s decision to limit the scope of the remand is consistent with the
Regents precedent, there is no clear legal error to correct. Reconsideration is, therefore,
not appropriate in this case.

       C.     Defendant Need Not Provide Privileged Materials

       In its motion, defendant also requests clarification as to whether the court’s
remand “obligates [defendant] to produce to the [c]ourt and the parties documents, if
any, that would ordinarily be protected by the attorney-client privilege, the attorney
work-product doctrine, or other applicable privileges.” ECF No. 49 at 4. The court’s
remand order did not direct defendant to produce any privileged materials, it merely
“permitted [the VA] to identify any documents or materials that were prepared prior to
the corrective action that would have informed the agency’s decision-making process . . .
and advise the [c]ourt if it has anything in the record . . . that can be provided to the
[c]ourt.” ECF No. 48 at 2 (emphasis added). As such, defendant is not obligated,
pursuant to the court’s October 26, 2020 order, to provide any privileged documents to
the court or the parties.

IV.    Conclusion

       Accordingly, for the foregoing reasons:

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(1)   Defendant’s motion for reconsideration of the court’s October 26, 2020
      order clarifying the remand in this matter, ECF No. 49, is DENIED;

(2)   On or before February 19, 2021, the parties are directed to CONFER and
      FILE a notice attaching the parties’ agreed upon redacted version of this
      opinion, with all competition-sensitive information blacked out; and

(3)   All other outstanding deadlines in the court’s August 5, 2020 order, ECF
      No. 34, remain in place.

IT IS SO ORDERED.

                                 s/Patricia E. Campbell-Smith
                                 PATRICIA E. CAMPBELL-SMITH
                                 Judge

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