Upon receipt of the second invitation to bid, 24 Hour contacted LIRR to determine why the first bid was refused. On June 30, LIRR received a timely bid protest on behalf of 24 Hour Fuel Oil Corp, Sparks Aff. at P 52, contending that LIRR's decision to cancel the first bid and re-bid was "arbitrary and unlawful." Yakobowicz's Aff. at P 3. The LIRR denied the protest by letter dated July 14, 1995. Sparks Aff. at P 55. On July 26, 1995, 24 Hour appealed LIRR's denial of its bid protest. Id. at P 61. LIRR responded to plaintiff's appeal on August 8, 1995 refusing to rescind the prior rejection of plaintiff's protest. Id. at P 64.
On August 11, 1995, LIRR extended the 1992 contract under "all of the original contract terms." Yakobowicz's Aff. at P 69. Then, according to 24 Hour, on August 22, 1995, LIRR awarded the 1995 contract to it but back dated the contract to August 13, 1995 and required the "spot price" to be used based on NY/Boston barge. Id. at P 70. However, LIRR claims that the back dating of the contract was simply an error, explaining that the second page of the Purchase Order awarding the bid has been corrected. It had erroneously stated, "Performance Period is for 36 months from August 13, 1995" when it was intended to become effective on the date of the award which was August 22, 1995. Sparks Aff. at PP 66-67.
Plaintiff requests the re-bid award be vacated and the first bid be reinstated. Levine's Aff. at P 55. 24 Hour claims that it cannot be awarded monetary compensation because the price of the oil cannot accurately be determined. Plaintiff also claims that the re-bid violated LIRR's own protest procedures. Id. at PP 56-58.
Thus, two related questions must be addressed -- whether federal question jurisdiction exists and whether 24 Hour's assertions provide a claim upon which relief can be granted. Only if a federal claim exists would the court have to consider whether a permanent injunction is appropriate in this action.
Plaintiff claims that the issue of whether there is subject matter jurisdiction has already been decided, and, consequently, did not reply to defendant's assertions that federal question jurisdiction does not exist in this instance. See Pl.'s Reply Memo. at 9-11. A court's determination that it has subject matter jurisdiction is res judicata of the issue, but only if the jurisdictional question actually was litigated and expressly decided. Stoll v. Gottlieb, 305 U.S. 165, 83 L. Ed. 104, 59 S. Ct. 134 (1938); Clapp v. C.I.R., 875 F.2d 1396 (9th Cir. 1989) (finding that the right to appeal based on lack of subject matter jurisdiction is not waived after a court enters judgment pursuant to a stipulated settlement, even though the right to appeal the settlement was not reserved); In the Matter of the Trimble Co., 479 F.2d 103 (3d Cir. 1973). Although the matter of federal jurisdiction was briefed in the defendant's opposition memorandum to the plaintiff's request for a preliminary injunction, and the plaintiff's reply memorandum responded to the jurisdictional question, the issue was not expressly decided when the Court denied the preliminary injunction. In fact, at the July 19, 1995 conference, the Court said: "At least for now, I will say there is federal jurisdiction." Tr. at 30. This certainly is not a final decision on the matter.
Federal question jurisdiction is based on 28 U.S.C. § 1331 which states that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treatises of the United States." For purposes of the matter at issue, a case arises under federal law if from the face of the complaint it is apparent that the plaintiff's cause of action was created by federal law or if a federal law that creates a cause of action is an essential element of plaintiff's claim.
See generally Louisville & Nashville Railroad v. Mottley, 211 U.S. 149, 53 L. Ed. 126, 29 S. Ct. 42 (1908); Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983); Verlinden v. Central Bank of Nigeria, 461 U.S. 480, 76 L. Ed. 2d 81, 103 S. Ct. 1962 (1983).
Here, 24 Hour's complaint alleges that federal question jurisdiction exists because defendant's conduct at issue is regulated by 49 C.F.R. § 18.36 ("The Common Grant Regulation"). 24 Hour claims: "As grantees . . . of the [Federal Transit Administration], the LIRR and MTA are governed by the relevant provisions of 49 C.F.R. Part 18." Compl. at P 39. The complaint then alleges a multitude of deviations from these standards which revolve around LIRR's failure both to award the contract to 24 Hour when it was the lowest bidder and to provide sound documented reasons why the bid was rejected. Compl. at PP 40-49. 24 Hour interprets 49 C.F.R. § 18.36 to require a contract to be awarded to the lowest bidder after a bidding procedure. Further, the federal regulations only permit rejection of a bid if "there is a sound documented reason," 49 C.F.R. § 18.36(d)(2)(ii)(E), which 24 Hour maintains does not exist here. See Compl. at P 40-49.
Then, in its reply memorandum, 24 Hour claims that the well pleaded complaint rule is satisfied since "plaintiff raises a federal cause of action by alleging that the LIRR, as a grantee of the FTA, is not only subject to [49 C.F.R. § 18], but also [it] has violated [that regulation] by its wrongful refusal to award Plaintiff the contract under Inquiry No. ME39-6359, as the lowest responsible bidder." July 18, 1995 Reply Memo. at 4. And, consequently, plaintiff claims federal question jurisdiction exists.
While 24 Hour believes that it is significant that LIRR has not addressed the "well-pleaded complaint" issue, see July 18, 1995 Reply Memo. at 3, the dispositive issue is whether 24 Hour has stated a claim upon which relief can be granted. Consequently, assuming that federal question jurisdiction exists,
does 24 Hour have a private right of action under 49 C.F.R. § 18.36?
Private causes of action are either explicit -- a statute or regulation specifically states that individuals have a right to sue under them -- or implicit -- the apparent intent of Congress or administrative agencies is to have individuals use them to litigate. 49 C.F.R. Part 18 does not explicitly provide for a private cause of action.
The Supreme Court has articulated four criteria to determine if an implicit private cause of action has been created in a statute.
First, is the plaintiff "one of the class for whose special benefit the statute was enacted." Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? And finally, is the cause of action one traditionally relegated to state law, in an area basically of concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? Cort v. Ash, 422 U.S. 66, 78, 45 L. Ed. 2d 26, 95 S. Ct. 2080 (1975) (citations omitted).