Ft Sumter Tours Inc v. Babbitt, Bruce D.

202 F.3d 349, 340 U.S. App. D.C. 126, 2000 U.S. App. LEXIS 2017
CourtCourt of Appeals for the D.C. Circuit
DecidedFebruary 15, 2000
Docket19-5142
StatusPublished
Cited by11 cases

This text of 202 F.3d 349 (Ft Sumter Tours Inc v. Babbitt, Bruce D.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ft Sumter Tours Inc v. Babbitt, Bruce D., 202 F.3d 349, 340 U.S. App. D.C. 126, 2000 U.S. App. LEXIS 2017 (D.C. Cir. 2000).

Opinion

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge:

Port Sumter Tours, Inc. (FST) provides passenger boat service to Fort Sumter National Monument in Charleston Harbor, South Carolina. The service is provided pursuant to a concession contract with the Secretary of the Interior, through the National Park Service (NPS or “Park Service”), under which FST pays the Secretary an annual franchise fee. This case involves a dispute over the fees charged during the second and third five-year periods of FST’s current contract. The district court rejected FST’s challenge to the *351 fees, as do we. We conclude that this court is without jurisdiction to consider plaintiffs attack on the fee charged during the second contractual period, because that challenge is to NPS’ nonreviewable refusal to settle then pending litigation between the parties concerning that fee. We reject plaintiffs attack on the fee charged during the third contractual period because FST failed to comply with the contractual requirements for seeking reconsideration.

I

FST’s current, fifteen-year contract with the Park Service was signed in 1986 and will expire in December 2000. The contract is governed by the National Park System Concessions Policy Act, 16 U.S.C. §§ 20-20g, 1 and Chapter 24 of NPS’ Concessions Guidelines, commonly referred to as NPS-48 (“NPS-48”) (Joint Appendix (J.A.) at 88-135). Under the contract, FST must pay the Park Service an annual franchise fee, which is a set percentage of plaintiffs annual gross receipts. The fee is calculated to provide the concessioner with a reasonable profit, based on a comparison to rates of return in similar industries. See 16 U.S.C. § 20b(d); NPS^8 (J.A. at 100). In evaluating a concession-er’s reported net profits, NPS may adjust reported expenses by comparing them to industry statistics. See NPS-48 (J.A. at 126).

FST’s 1986 contract is divided into three five-year periods. During the first, the franchise fee was set at 4.25% of gross receipts. Section 9(e) of the contract provides that the fee for the second and third five-year periods may be reconsidered on either party’s initiative pursuant to specified procedures. See J.A. at 32-33. This case involves efforts to reconsider the fee charged during each of those two periods.

A

In June 1991, at the end of the first five-year period, the Park Service notified plaintiff that it was reconsidering the franchise fee. After an initial analysis, NPS tentatively concluded that the appropriate fee should be 12%. That conclusion was based on an examination of FST’s financial reports, which persuaded the Park Service that FST had leased one of its boats from a related partnership in a deal that was “not an arm’s length transaction and has resulted in lower earnings than would have occurred under an outright purchase of the boat.” See NPS Franchise Fee Analysis ( J.A. at 74). NPS also found that FST overpaid its corporate officers relative to benchmarks for the water transportation industry. See id. at 73. Plaintiff objected to the proposed fee increase, and notified NPS that rather than arbitrate or negotiate the fee, “we believe it is in our mutual interest to seek a declaration of rights by the courts on this critical issue.” Fort Sumter Tours v. Babbitt (“FST I”), No. 0918-1AJ, slip op. at 3 (D.S.C. Feb. 3, 1994) (J.A. at 138). Having received notice of FST’s decision to forego arbitration and proceed to court, the Park Service notified FST that it had made a final decision to raise the fee to 12%.

On April 21, 1993, FST filed suit in the United States District Court for the District of South Carolina, charging, inter aha, that: (1) NPS lacked contractual or statutory authority to increase the franchise fee; (2) the increase violated the Administrative Procedure Act (APA), 5 U.S.C. § 706, because NPS acted arbitrarily and capriciously in employing the procedures it used to raise the fee; and (3) imposition of a 12% fee violated the APA because it was unjustified “by substantial evidence regarding the profits earned by FST.” FST I, slip op. at 4, 14 (J.A. at 139, 149). The South Carolina District Court rejected all of plaintiffs claims, finding the agency’s *352 procedures authorized and rational, and holding that the 12% fee was “not so excessive as to preclude a reasonable opportunity for [plaintiff] to earn a profit from its concession.” Id. at 11-21 (J.A. at 146-56). Plaintiff appealed to the United States Court of Appeals for. the Fourth Circuit, which, after de novo review, upheld the district court’s decision. The Court of Appeals rejected FST’s contractual and APA challenges to the franchise fee, finding that “NPS had both the statutory and the contractual authority to raise FST’s franchise fee.... [and that] the fee determination itself [was] unobjectionable.” Fort Sumter Tours, Inc. v. Babbitt (“FST II"), 66 F.3d 1324, 1337 (4th Cir.1995). On February 22, 1996, plaintiff petitioned the Supreme Court for a writ of certiorari.

During the week of March 10, 1996, while the petition for certiorari was pending, FST’s president, George Campsen, Jr., approached NPS’ Concessions Program Manager, Robert Yearout, at a trade association meeting. Campsen asked Yearout whether he was willing to discuss the franchise fee. Although the parties dispute the contents of the ensuing conversation, 2 shortly after the meeting Campsen wrote Yearout a letter. In it, Campsen noted that “the litigation was ongoing” and that the “judicial process” was “time consuming and expensive,”- and he suggested that it was “of mutual interest that NPS and FST make a good faith attempt to resolve this matter.” J.A. at 177-78. Campsen also expressed his appreciation for Yearout’s “willingness to explore -the opportunity for some ‘common ground’ resolution.” Id. at 177.

On May 10, 1996, Campsen and his son met with three government officials: Year-out, an Interior Department attorney, and a financial analyst for the Park Service. The parties again dispute the contents of their conversation. 3 Five days after the meeting, the Interior Department attorney sent Campsen a letter, thanking him for the opportunity to meet, and concluding that “[b]ecause of the continuing litigation ... , any further correspondence on this matter will come from John Douglas, Assistant U.S. Attorney.” Id. at 187.

On May 28, 1996, the Supreme Court denied the petition for certiorari. See Fort Sumter Tours, Inc. v. Babbitt, 517 U.S. 1220, 116 S.Ct. 1848, 134 L.Ed.2d 949 (1996). In early June, the NPS financial analyst traveled to South Carolina to meet with FST officials.

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Bluebook (online)
202 F.3d 349, 340 U.S. App. D.C. 126, 2000 U.S. App. LEXIS 2017, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ft-sumter-tours-inc-v-babbitt-bruce-d-cadc-2000.