Dairy Maid Dairy, Inc. v. United States

147 F.R.D. 109, 25 Fed. R. Serv. 3d 1235, 1993 U.S. Dist. LEXIS 20911, 1993 WL 105703
CourtDistrict Court, E.D. Virginia
DecidedApril 6, 1993
DocketCiv. A. No. 2:93CV260
StatusPublished
Cited by7 cases

This text of 147 F.R.D. 109 (Dairy Maid Dairy, Inc. v. United States) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dairy Maid Dairy, Inc. v. United States, 147 F.R.D. 109, 25 Fed. R. Serv. 3d 1235, 1993 U.S. Dist. LEXIS 20911, 1993 WL 105703 (E.D. Va. 1993).

Opinion

MEMORANDUM OPINION AND ORDER

PAYNE, District Judge.

Dairy Maid Dairy, Inc. (“Dairy Maid”) instituted this action seeking a declaration that the defendants’ (collectively referred to as DOA”) violated the Competition In Contracting Act (“CICA”), 31 U.S.C. § 3553(c) and (d), by refusing to stay the award and performance of a contract for operation of a milk production plant in Korea to Contact International Corporation (“Contact International”) pending resolution by the General Accounting Office (“GAO”) of pre-award and post-award protests filed by Dairy Maid pursuant to CICA At the time it filed this action on March 30, 1993, Dairy Maid was operating the milk production plant and DOA had given Dairy Maid notice that its contract would expire at midnight (Korean time) March 31, 1993 and that immediately thereafter Contact International would commence operation of the milk plant pursuant to the terms of the contract which is the subject of the protests pending before the GAO.

Dairy Maid also moved for entry of an order temporarily restraining DOA from terminating on March 31,1993 the existing contract with Dairy Maid and from proceeding with performance of the contract awarded to Contact International pending a decision by the GAO on Dairy Maid’s protests. On March 30, 1993, the court granted Dairy Maid’s motion for a temporary restraining order, established an expedited discovery and briefing schedule, and fixed April 8,1993 as the trial date on the merits, thereby merging the requests for preliminary and permanent injunctive relief. Subsequently, DOA moved for a brief postponement of the trial, citing the necessity of extra time to prepare properly for trial. The court granted DOA’s request over the objection of Dairy Maid. The expedited discovery and briefing schedules were adjusted slightly and the date of trial was moved to April 13, 1993.

Contact International has moved for leave to intervene in these proceedings as a matter of right under Fed.R.Civ.P. 24(a)(2). For the reasons set forth below, that motion is denied.

DISCUSSION

The right to intervene in a pending action is conferred by Fed.R.Civ.P. 24(a)(2):

... when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

Accordingly, in this circuit, Contact International must show:

First, an interest sufficient to merit intervention; second, that without intervention, its interest may be impaired; and third, that the present litigants do not adequately represent its interest.

Commonwealth of Virginia v. Westinghouse Electric Corp., 542 F.2d 214 (4th Cir.1976). Of course, Contact International must meet all three prongs of the test in order to establish its right to intervene. Id.

1. Interest in the Subject Matter of This Action.

This action challenges the failure of DOA to comply with two sections of CICA governing the lifting of stays which, by law, auto[111]*111matically go into effect upon the filing of protests against the award or the performance of government contracts. DOA is entitled to override the automatic stays and to award, or proceed with performance of, the contract under certain circumstances. In this instance, DOA was entitled by statute to award the protested contract to Contact International, and thereby override the stay, “upon a written finding that urgent and compelling circumstances which significantly affect interest of the United States will not permit waiting for the decision of the [GAO]....” 31 U.S.C. § 3553(c)(2)(A). Further, where, as here, the contract is awarded and the government receives notice of-protest within ten days of the award date, performance of the contract is suspended pending resolution of the protests by the GAO unless the DOA makes the same finding required under § 3553(c)(2)(A) as to the post-award protest and the need to proceed with the contract.

Dairy Maid asserts that it is entitled to the benefit of the automatic stay provisions of both sections of the statute because: (1) it filed pre-award and post-award protests; (2) DOA’s findings are insufficient to override the pre-award protest; and (3) the DOA has made no findings at all in respect of the post-award protest. Hence, the focus of this action is whether: (1) Dairy Maid is entitled to the benefit of the stay provisions; (2) DOA has satisfied the legal requirements for overriding the stay provisions applicable to the pre-award protest; and (3) DOA’s failure to order a cessation of the performance of the contract is in violation of the statute applicable to post-award protests.

Fed.R.Civ.P. 24(a) does not articulate the nature of the interest in an action which is sufficient to permit intervention as of right, but the Supreme Court of the United States has held that “[w]hat is obviously meant ... is a significantly protectable interest.” Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971). Of course, a general interest in the subject matter of pending litigation does not constitute a protectable interest within the meaning of Rule 24(a)(2). To be protectable, the putative intervenor’s claim must bear a close relationship to the dispute between the existing litigants and therefore must be direct, rather than remote or contingent. 3B Moore’s Federal Practice ¶ 24.07[2].

Considering the limited scope of this action and the statutory and regulatory scheme governing the protests of government contracts and taking into account the statutorily required automatic stay pending such protests and the circumstances permitting override of those stays, it does not appear that Contact International has established the existence of a protectable interest in the subject matter of this action. Contact International contends that the mere fact of the award of the contract to it by DOA demonstrates a protectable interest within the meaning of Rule 24(a)(2). Contact International’s pleadings on this point are conclusory and provide no explication of its contention that it has a protectable interest. However, the statutory scheme clearly contemplates that Contact International’s interest in that contract can be automatically foreclosed by operation of law pending resolution of a dispute on the merits by the GAO. Accordingly, the interest of Contact International in the subject matter of this action is remote and contingent.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Thomas v. Andino
D. South Carolina, 2020
Cooper Technologies, Co. v. Dudas
247 F.R.D. 510 (E.D. Virginia, 2007)
Nish & Goodwill Services, Inc. v. Cohen
191 F.R.D. 94 (E.D. Virginia, 2000)
Bragg v. Robertson
183 F.R.D. 494 (S.D. West Virginia, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
147 F.R.D. 109, 25 Fed. R. Serv. 3d 1235, 1993 U.S. Dist. LEXIS 20911, 1993 WL 105703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dairy-maid-dairy-inc-v-united-states-vaed-1993.