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08/25/77 Public Citizen, Et Al. v. Lockheed Aircraft

August 25, 1977

ASSOCIATION, APPELLANT

v.

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).

APPELLATE PANEL:

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. ยง 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 ...


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