UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
August 25, 1977
LOCKHEED AIRCRAFT CORPORATION, ET AL. 1977.CDC.199 DATE DECIDED: AUGUST 25, 1977
UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
PUBLIC CITIZEN, et al. MACHINERY DEALERS NATIONAL
Appeal from the United States District Court for the District of Columbia (Civil Action No. 74-535).
Danaher, Senior Circuit Judge, Tamm and Robinson, Circuit Judges. Opinion for the Court filed by Circuit Judge Tamm.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE TAMM
The present appeal requires this court to delve once more into the ever-increasing underbrush of legal precedents applying the doctrine of standing to challenge administrative acts by a federal agency. The appellant, Machinery Dealers National Association , is a trade association representing approximately 350 members who buy and sell used industrial machinery. Along with a senator and three congressmen, *fn1 MDNA sought declaratory and injunctive relief invalidating a negotiated sale by the General Services Administration of real and personal property of the federal government *fn2 to Lockheed Corporation on the grounds that the sale violated the Federal Property and Administrative Services Act (the Act), 40 U.S.C. § 471 et seq. (1970). *fn3 MDNA does not seek relief for injuries to any institutional interest, but claims only to represent its member-firms which "as potential purchasers of some of the property which was sold to Lockheed and as potential sellers of used machinery to Lockheed . . . suffered economic harm as a result of the illegal acts of GSA . . . ." *fn4
Upon Lockheed's motion, which was joined by GSA, the district court dismissed the plaintiffs' complaint. *fn5 The district court determined that MDNA lacked standing because the interests of its members affected by the sale are not arguably within the zone of interests protected by the Act. Although we rest our conclusion on a different basis, we agree that MDNA has not demonstrated that it has standing to seek judicial review of GSA's sale of Plant No. 14 to Lockheed, and therefore affirm the judgment of the district court. I. BACKGROUND
A. The Statutory Scheme
Any sale of government property to a private party must comply with the provisions of the Federal Property and Administrative Services Act. Under the Act, property subject to the control of a federal agency which is not required for the discharge of the agency's responsibilities may be declared "excess". *fn6 GSA then determines whether any other federal agency can use the property and, if not, declares the property "surplus". *fn7 The Act permits GSA or an agency authorized by GSA to dispose of surplus property by sale or other method of transfer "upon such . . . terms and conditions as the Administrator [of GSA] deems proper." *fn8 The disposing agency must, however, first seek the advice of the Department of Justice as to whether the contemplated disposal would be inconsistent with federal antitrust laws. *fn9
With certain exceptions, disposals must be accomplished through publicly advertised, competitive bidding. *fn10 The advertisement for bids, where required, must be under terms and conditions which "shall permit that full and free competition which is consistent with the value and nature of the property involved," *fn11 and GSA must accept that bid which is "most advantageous to the Government, price and other factors considered." *fn12
B. Course of Negotiation, Declaration of Excess, and Effectuation of Sale
Prior to 1968, the government-owned portions of Plant No. 14 were dedicated to the use of and under the control of the Department of Defense . In that year, *fn13 DOD entered into negotiations with Lockheed concerning the sale of the plant. Following the initiation of these negotiations, DOD declared Plant No. 14 excess to its needs and responsibilities on two conditions: (1) that the property be sold only to Lockheed, and (2) that Lockheed be required to maintain the plant's defense production capacity for a period of at least five years. *fn14 Thereafter, the property was transferred to GSA for disposition. Operating on the assumption that no other agency would be interested in obtaining property which DOD would allow to be transferred only to Lockheed and only on the condition that the defense production capacity of the property be maintained for a five year period, *fn15 GSA declared the property "surplus" without offering it to any other agency. After further negotiations and without advertising publicly for competitive bids, GSA agreed to sell Plant No. 14 to Lockheed. *fn16 GSA, however, reserved the right to rescind the sale agreement should the Attorney General advise that the sale would be inconsistent with the antitrust laws.
The proposed terms and conditions of the sale were then submitted to the Department of Justice. Throughout a series of correspondence with GSA, the Attorney General's office maintained that the proposed sale in fact was inconsistent with the antitrust laws. *fn17 Nevertheless, GSA informed Lockheed that it would agree unconditionally to the sale, and the title to the property subsequently was conveyed on May 30, 1973.
C. Allegations of Illegality and Claim to Relief
MDNA claims that the negotiation and sale of Plant No. 14 to Lockheed violated two provisions of the Act and also constituted arbitrary and capricious action on the part of GSA. First, MDNA contends that DOD could not properly declare Plant No. 14 surplus because the condition requiring Lockheed to maintain the plant's defense production capacity for five years demonstrates that DOD had a continuing need for the plant. *fn18 Second, MDNA claims that the failure to advertise publicly for competitive bids was unlawful. *fn19 Third, MDNA argues that GSA acted arbitrarily and capriciously because it ignored the advice of the Attorney General's office that the proposed sale would be inconsistent with the antitrust laws and based the sale price on an outdated appraisal. *fn20
On the basis of these arguments MDNA seeks a judicial declaration that GSA's attempted sale to Lockheed was unlawful and of no force or effect and an order requiring GSA to "take immediate steps to exercise full right, title, interest and control over said Property." *fn21 It is important to note that MDNA seeks only to effectuate a rescission of the sale and does not seek to have the court require a subsequent sale on any specified terms. II. INJURY IN FACT
Under the "case or controversy" requirement of Article III of the Constitution, a claim is justiciable in the federal courts only if the claimant has "'such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-99, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975) (emphasis in original). Yet in the view we take of this case we do not reach the question whether the injury here alleged meets the "irreducible Art. III case-or-controversy requirements for standing," United States v. Richardson, 418 U.S. 166, 180-81, 41 L. Ed. 2d 678, 94 S. Ct. 2940 (1974) (Powell, J., concurring), because we are governed by the Administrative Procedure Act, 5 U.S.C. § 702 (1970), which grants standing to challenge administrative action to any "person suffering legal wrong . . . or adversely affected or aggrieved" by it. See United States v. Students Challenging Regulatory Agency Procedures , 412 U.S. 669, 687-90 n.14, 37 L. Ed. 2d 254, 93 S. Ct. 2405 (1973); Scanwell Laboratories, Inc. v. Shaffer, 137 U.S. App. D.C. 371, 424 F.2d 859, 872 (1970); cf. K. Davis, Administrative Law of the Seventies § 22.02-11, at 509 (1976); Currie, The Supreme Court and Federal Jurisdiction: 1975 Term, 1976 Sup. Ct. Rev. 183, 184. If the plaintiff fails the statutory test of showing the challenged action has adversely affected him, we need not address the constitutional issue. To meet this threshold requirement, a plaintiff must demonstrate *fn22 that the challenged acts have harmed him or that he personally would benefit in some tangible manner from the court's intervention in the controversy. See Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 220-22, 41 L. Ed. 2d 706, 94 S. Ct. 2925 (1974); Evans v. Lynn, 537 F.2d 571, 595 (2d Cir. 1976) (en banc). An association may seek relief not only for any institutional injuries which it might have suffered, but also as a representative of its members if those members would have standing if they themselves brought suit. Warth v. Seldin, supra at 511; see Sierra Club v. Morton, 405 U.S. 727, 734-41, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972). As noted above, MDNA has not claimed that it has suffered any injury to an institutional interest. Therefore, its standing to challenge the sale of Plant No. 14 depends on a demonstration that one or more of its members have suffered an "injury in fact".
A. Characteristics of Injury in Fact
An "injury in fact" need not be substantial to support federal court jurisdiction over this challenge to agency action; an identifiable trifle will suffice. United States v. SCRAP, supra at 689 n.14; K. Davis, Administrative Law Treatise §§ 22.09-5, 22.09-6 (Supp. 1970). The injury may be one which MDNA's members have already sustained or are immediately in danger of sustaining. O'Shea v. Littleton, 414 U.S. 488, 494, 38 L. Ed. 2d 674, 94 S. Ct. 669 (1974). Nonetheless, the injury must be perceptible, concrete, specific, United States v. SCRAP, supra at 689, and real and immediate rather than conjectural or hypothetical, California Bankers Association v. Shultz, 416 U.S. 21, 69, 39 L. Ed. 2d 812, 94 S. Ct. 1494 (1974); Golden v. Zwickler, 394 U.S. 103, 108-10, 22 L. Ed. 2d 113, 89 S. Ct. 956 (1969). The injury must be particularized, Schlesinger v. Reservists Committee to Stop the War, supra at 220-22, and capable of direct redress by the court through the requested remedy. See Linda R.S. v. Richard D., 410 U.S. 614, 617-19, 35 L. Ed. 2d 536, 93 S. Ct. 1146 (1973). A plaintiff may not rely on "the remote possibility, unsubstantiated by allegations of fact, that [his] situation might have been better had respondents acted otherwise, and might improve were the court to afford relief." Warth v. Seldin, supra at 507; see Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 42-46, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976); Bowker v. Morton, 541 F.2d 1347, 1349 (9th Cir. 1976).
Standing alone, these generalized criteria for assessing the jurisdictional adequacy of a demonstration of "injury in fact" are nebulous and difficult of application. We must therefore look to the analytical method employed by the Supreme Court in recent decisions for guidance in resolving MDNA's standing claim.
In Linda R.S. v. Richard D. (supra) a mother of an illegitimate child sought an injunction to require prosecution of the putative father under a state statute criminalizing the failure to support a child. The statute had been consistently construed to apply solely to the parents of legitimate children, resulting, according to the mother, in a challengeable deprivation of equal protection. She claimed standing to present such a challenge in federal court on the basis of economic injury to her interest in securing child support from the father. The Supreme Court observed that, even assuming the requested relief were granted,
it would result only in the jailing of the child's father. The prospect that prosecution will, at least in the future, result in payment of support can, at best, be termed speculative. Certainly, the 'direct' relationship between the alleged injury and the claim sought to be adjudicated, which previous decisions of this Court suggest is a prerequisite of standing, is absent in this case.
410 U.S. at 618. Subsequent cases have affirmed the principle that a claimant is required to show a substantial probability that the requested relief would benefit him in some perceptible, tangible fashion. See, e.g., Simon v. Eastern Kentucky Welfare Rights Organization, supra; Bowker v. Morton (supra). 23
The disposition of some of the claims presented in Warth v. Seldin (supra) indicates the proper application of this criterion where a plaintiff claims interference to the profitability of an on-going business. In Warth, two associations of housing contractors sought to challenge a zoning ordinance which barred construction of low-income housing. The Court held that one association had failed to "show the existence of any injury to its members of sufficient immediacy and ripeness to warrant judicial intervention" because it failed to refer to any project of its members with which the enforcement of the ordinance interfered at the time the lawsuit was commenced. 422 U.S. at 516. The other association claimed by affidavit to represent " at least seventeen groups that have been, are, or will be involved in the development of low- and moderate-cost housing," which groups allegedly had been detrimentally affected by the challenged ordinance. The Supreme Court noted, however, that with one exception,24
the complaint [did] not suggest that any of those groups ha[d] focused its efforts on Penfield or ha[d] any specific plan to do so. Again with the same exception, neither the complaint nor any materials of record indicate[d] that any member of Housing Council ha [d] taken any step toward building housing in Penfield, or ha[d] dealings of any nature with respondents.
422 U.S. at 516-17. Without further mention of the " nonexcepted" association members, the Supreme Court found that this second association also lacked standing. It therefore appears that to establish standing to seek redress for an economic injury to a competitive interest, a plaintiff must demonstrate that within a reasonably proximate period prior to the commencement of the suit some action to further that competitive interest had been taken and had been interfered with, or that such action to be taken in the future was contemplated at that time. 25 Otherwise, there is no non-speculative basis to conclude that the grant of relief might actually improve the status of the claimant.
The proper application of the criteria requiring concrete, perceptible harm of a real, non-speculative nature is illustrated by the disposition in California Bankers Association v. Shultz, supra at 67-69. Therein, individual bank depositors and an association representing other bank depositors sought an injunction against enforcement of a regulation that required financial institutions to report each cash transaction involving more than $10,000. The individual depositors and the representative association claimed that this regulation contravened fourth amendment protections against unreasonable searches. The Court held, however, that they lacked standing, stating:
We simply cannot assume that the mere fact that one is a depositor in a bank means that he has engaged or will engage in a transaction involving more than $10,000 in currency, which is the only type of domestic transaction which the Secretary's regulations require that the banks report. That being so, the depositor plaintiffs lack standing to challenge the domestic reporting regulations, since they do not show that their transactions are required to be reported.
416 U.S. at 68 (footnote omitted).
Absent a showing that the plaintiffs are within the class of persons whose interests are necessarily, or with substantial probability, affected by the challenged agency action, the nexus between allegedly illegal agency action and the interests of the claimants is too speculative, and therefore the statutory requirement that the plaintiff be "aggrieved" or "adversely affected" is not satisfied. Inclusion within such a class may not be inferred from facts indicating only potential inclusion, for that would improperly allow speculation and conjecture to serve as a basis for federal court jurisdiction. See Golden v. Zwickler, supra; Metcalf v. National Petroleum Council, 180 U.S. App. D.C. 31, 553 F.2d 176 (1977).
B. Analysis of MDNA's Demonstration of "Injury in Fact "
In light of the foregoing discussion of the criteria of standing and of the Supreme Court's application of these criteria, we find MDNA's proffered demonstration of "injury in fact" inadequate.
1. Injury to Interest in Selling to Lockheed
MDNA's first claim is that some members have in the past sold machinery to Lockheed and that during the foreseeable future Lockheed's needs for such machinery have been satisfied through the sale of Plant No. 14. Thereby, MDNA reasons, its members have been injured through the elimination of opportunities to profit through future sales to Lockheed.
We note, initially, that prior to the sale of Plant No. 14 the very machinery which Lockheed has now purchased subject to a five year use restriction was being operated by Lockheed for similar (if not the very same) purposes under authority granted by DOD.26 MDNA's officers have testified, however, that the present conditional sale arrangement allows Lockheed less restricted use of the Plant No. 14 machinery for private uses than the pre-sale DOD contractual authorization. This less restricted use, they claim, has reduced Lockheed's need for machinery relative to the pre-sale arrangement.27
Assuming, as we must, that this claim is true,28 it nevertheless does not demonstrate an injury any less speculative than that which proved insufficient in Warth v. Seldin (supra). MDNA does not refer to any existing relationship between Lockheed and one or more MDNA members which would require Lockheed to buy from them as opposed to buying from non-members.29 We do not know from the record whether this type of machinery would have been available to Lockheed through MDNA members, and the mere rescission of the sale would not necessarily have made this machinery available to MDNA members through competitive bidding.30 To find that MDNA members' interest in selling to Lockheed was injured by GSA's action would require us to assume (1) that Lockheed would seek to purchase similar machinery from private sources if the sale were rescinded and Lockheed continued to operate Plant No. 14 under DOD authorization; (2) that MDNA members would be among those private sources from which Lockheed would seek to obtain that machinery; and (3) that MDNA members would be able to supply Lockheed with such machinery. This conjectural chain of inferences is simply too speculative to support a finding that the claimed injury would be remedied through the grant of the requested relief of rescission of the sale. Therefore, standing to sue on this basis must be denied. See Warth v. Seldin, supra; Linda R.S. v. Richard D. (supra).31
2. Injury to Interest in Bidding for Plant No. 14
MDNA's second allegation of "injury in fact" relates to its members' interest in bidding competitively for the machinery in Plant No. 14. According to MDNA, "many MDNA members would have attempted to purchase some of the property sold to Lockheed, and for some of such property would have paid more than Lockheed did."32 It is not readily apparent, however, that any MDNA member, or any group of members was actually in a position to bid for Plant No. 14 as a unit. Although the conditions that the Plant only be sold to Lockheed and that its defense production capacity be maintained may be legally suspect, it is clear that GSA could sell Plant No. 14 as a unit.33 Nothing in the record indicates, and we will not assume, that GSA would sell the machinery on a piecemeal basis.
Therefore, in light of the holding in Warth v. Seldin (supra) MDNA may challenge the failure to advertise for competitive bidding only upon demonstration that its members presently participate in or contemplate participation in a viable business project which had adequate resources and an existent intent to purchase property such as Plant No. 14 as a whole. No such project or intent was alleged by MDNA in its complaint which claimed only that its members were interested in purchasing "some of the property sold to Lockheed." The depositions of MDNA's officers only raised the possibility that a group of members might organize and, with the possible involvement of unnamed real estate investors, might together have adequate resources to bid competitively for Plant No. 14 as a whole.34 No details are given. Not even one MDNA member possessing or participating in a group which possessed both adequate assets and an existent intent to bid effectively on Plant No. 14 is identified. Therefore, we hold that MDNA has failed to demonstrate that any of its members come within a class whose injuries caused by GSA's failure to advertise this sale for competitive bidding are of "sufficient immediacy and ripeness to warrant judicial intervention." Warth v. Seldin, supra at 516; California Bankers Ass'n v. Shultz, supra at 67-69.
3. Injury Through Increased Competition
Although not alleged in its complaint nor referred to by the district court in its memorandum and order of dismissal, MDNA claims a third "injury in fact" on appeal.35 Relying solely on the deposition testimony of one of its officers36 which indicates that Lockheed has placed some of the machinery from Plant No. 14 up for auction, MDNA argues that the challenged sale has resulted in increased competition for its members, an injury which they claim is analogous to that which the Supreme Court found adequate to support standing in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970).
The lone evidence of this claimed resale of the machinery in Plant No. 14 is a flyer, distributed by an MDNA member, announcing an auction of machinery which lists some of the machinery obtained by Lockheed through the challenged sale.37 There is no suggestion in the record, however, that Lockheed regularly competes with MDNA members in the machinery resale market or that in the normal course of business Lockheed periodically makes such sales. All that is indicated is that in November 1973 Lockheed tried to resell some machinery obtained through the purchase of Plant No. 14.38 On this showing alone MDNA cannot claim that its members are immediately threatened with future injury of sufficient immediacy and ripeness to warrant judicial intervention. Warth v. Seldin, supra at 516; see, e.g., O'Shea v. Littleton, supra at 494; Metcalf v. National Petroleum Council, supra at 186-87.
Additionally, MDNA has not demonstrated that the November 1973 auction actually resulted in an injury to its members through increased competition. The record does not disclose who received notice of this auction other than MDNA's members, nor who bid on the machinery.39 Therefore, there is no non-speculative basis for finding that Lockheed actually sold or attempted to sell Plant No. 14 machinery to the same class of buyers to whom MDNA members would sell or attempt to sell. MDNA has failed to demonstrate that the challenged sale actually resulted in increased competition in the past or threatens to increase competition in the immediate future; therefore, this claim of "injury in fact" will not support federal court jurisdiction.40
There being no demonstration on the part of MDNA which adequately indicates that one or more of its members could have established that the sale of Plant No. 14 resulted in an "injury in fact" to their interests qua members of MDNA, MDNA lacks standing to challenge the sale. For this reason, the district court's dismissal of the action is