Chem Service, Inc. v. Environmental Monitoring Systems Laboratory-Cincinnati of the United States Environmental Protection Agency

12 F.3d 1256
CourtCourt of Appeals for the Third Circuit
DecidedDecember 27, 1993
DocketNo. 93-1196
StatusPublished
Cited by9 cases

This text of 12 F.3d 1256 (Chem Service, Inc. v. Environmental Monitoring Systems Laboratory-Cincinnati of the United States Environmental Protection Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chem Service, Inc. v. Environmental Monitoring Systems Laboratory-Cincinnati of the United States Environmental Protection Agency, 12 F.3d 1256 (3d Cir. 1993).

Opinions

OPINION OF THE COURT

ROTH, Circuit Judge:

This case arises from a dispute over three cooperative research and development agreements (“CRADAs”) entered into by the Environmental Monitoring Systems Laboratory-Cincinnati (“EMSL-CI”) of the Environmental Protection Agency (“EPA”). Chem Service, Inc., a non-party. to the CRADAs, brought suit against EMSL-CI, the laboratory’s director, and EPA, seeking to enjoin the government from performing certain functions agreed to under the CRADAs. The district court held that Chem Service lacked standing under the Administrative Procedure Act (“APA”) to bring this suit, because it did not fall within the zone of interests Congress intended to protect when establishing the authority for government laboratories to enter these types of cooperative arrangements, 816 F.Supp. 328. We disagree and find that, as to its first claim, Chem Service does fall within the zone of interests. We will therefore remand to the district court to determine whether the sections of the CRADAs in dispute are actually procurement contracts, pursuant to 31 U.S.C. § 6303, which would require the government to comply with the federal procurement laws.

I.

In 1986, Congress passed the Federal Technology Transfer Act (“FTTA”), Pub.L. No. 99-502, 100 Stat. 1785, codified at 15 U.S.C. § 3710a et seq. (1988). Among the primary purposes of the FTTA was that of increasing the nation’s economic competitiveness by encouraging technology transfer from federal government-operated laboratories to private industry. To effectuate this purpose the FTTA authorized federal agencies to permit the director of any government-operated laboratory to enter into CRA-DAs with private entities. 15 U.S.C. § 3710a(a)(l). In defining the term CRA-DA,1 Congress intended to establish a new type of contractual relationship between a federal laboratory and a non-federal party for research and development purposes. Congress specifically intended that a CRA-DA was not to be a procurement contract, a grant agreement, or a cooperative agreement within the definition of 31 U.S.C. §§ 6303 and 6305 (1988).2

[1259]*1259On January 4, 1991, EMSL-CI entered into a CRADA with NSI Technology Services Corporation (“NSI”) pursuant to the FTTA.3 EMSL-CI entered into similar CRADAs with Ultra Scientific, Inc., (“Ultra”) on January 21, 1991, and with Spex Industries, Inc., (“Spex”) on May 9, 1991. The language of these CRADAs provides that they were designed to continue the efforts of EMSL-CI in refining and distributing reference materials for calibration of analytical instruments.4 Plaintiff Chem Service is in the business of selling organic chemical analytical and reference standards, although it did not enter into a CRADA with EMSL-CI. Chem Service contends that contrary to the expressed purpose of CRADAs as established by Congress, included within these CRADAs is the authorization for NSI, Spex and Ultra to sell reference materials manufactured according to pre-existing technologies. Chem Service urges that the commercial exploitation of such pre-existing technologies violates the provisions of the FTTA, which was .established to encourage cooperative research and development efforts.

Prior to entering into the CRADAs, EPA ran several programs for the production and distribution of reference materials. Two of these programs were the Repository for Toxic and Hazardous Materials (“THM”) and the Pesticides Repository. In 1989, NSI contracted with EPA to provide support services for both the THM Repositoiy and the Pesticides Repository. The contract covered the period from October 1, 1989, to September 30, 1990, with the government retaining the option to extend the term of the contract for up to four additional annual periods. This contract was awarded in compliance with the federal procurement laws and the Federal Acquisition Regulation.5

[1260]*1260The contract between EPA and NSI provided that the ‘.‘[THM] Repository contractor [NSI] will produce, test, and distribute analytical reference standards of high-purity for the calibration of measurement instrument systems and tests of analytical methods.” Joint Appendix at A-264. Specifically, the contract required NSI to “[s]ynthesize chemicals that are unobtainable, overly expensive, or unavailable in satisfactory pure form ... [and] [p]roduce calibration standards or other special materials by preparing solutions of each chemical and transferring and sealing aliquots in individual glass ampules.” Id. at A-264-65. The contract also required NSI to maintain the integrity and purity of bulk stock of THM Repository chemicals, procure additional chemicals, verify the purity and identity of new chemicals stocks, and conduct stability studies on the THM Repository.

In 1991, EMSL-CI and NSI entered into a CRADA. Chem Service averred in its amended complaint that the “CRADA between NSI and EMSL-CI authorizes, but does not require, NSI to produce and distribute additional reference samples after the existing ampule inventory is exhausted.” Id. at A-177.6 The CRADA’s Statement of Work provides that “EPA is primarily entering into this CRADA to assure the availability of accurate and reliable liquid organic standards for EPA methods.,... The standards will come from two sources; those available from the EPA [THM] Repository and those produced by NSI [under the CRA-DA].” Id. at A-62. Reference materials produced under both the competitive contract with NSI and the CRADA with NSI were intended by EPA to support EPA regulatory methods and agency endorsed monitoring programs. Id. at A-63 & A-264.

Prior to the NSI CRADA, EPA provided THM Repository reference materials free of charge to federal laboratories and non-federal parties. The NSI CRADA altered this arrangement. It provided that a one year supply of these reference materials would be provided “to the EPA Family” on a complimentary basis, but after this supply was distributed, NSI was authorized to sell the reference materials. Id. at A-62-66; The CRADA provided that EPA would receive a percentage of the receipts from these sales by NSI, to compensate EPA for the use of equipment and materials provided under the competitive contract, and for research and development. Id. at A-49-50.7

In addition, prior to finalizing the CRA-DAs, EMSL-CI began developing specifications for reference material standards in conjunction with the American Association for Laboratory Accreditation (“A2LA”), a pri-yate organization. During this period, Chem Service received accreditation by A2LA. Chem Service contends that in order to obtain and maintain its accreditation by A2LA it was, and is, required to submit to rigorous testing by independent laboratories and inspections by A2LA.

On June 18, 1991 EMSL-CI and A2LA entered into a Memorandum of Understanding (“MOU”).

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12 F.3d 1256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chem-service-inc-v-environmental-monitoring-systems-ca3-1993.