National Hydro Systems, Inc. v. Schramm

482 F. Supp. 693, 1979 U.S. Dist. LEXIS 7746
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 28, 1979
DocketCiv. A. Nos. 78-4030, 79-495
StatusPublished
Cited by1 cases

This text of 482 F. Supp. 693 (National Hydro Systems, Inc. v. Schramm) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Hydro Systems, Inc. v. Schramm, 482 F. Supp. 693, 1979 U.S. Dist. LEXIS 7746 (E.D. Pa. 1979).

Opinion

[695]*695OPINION

LUONGO, District Judge.

National Hydro Systems, Inc. (NHS), a manufacturer of water and wastewater treatment equipment, seeks review of the denial by the regional administrator of the Environmental Protection Agency (EPA) of protests filed in connection with approved grants for the construction of sewage treatment plants in Charlottesville, Virginia, (the Rivanna project), and Seaford, Delaware (the Seaford project).1 Both complaints allege procedural irregularities in the processing of the NHS protests as well as substantive violations of portions of the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251, 1281, 1284 (1976 & Supp. I 1977) and the regulations promulgated thereunder, 40 C.F.R. §§ 35.900 to .970 (1979). In addition to declaratory relief, NHS initially requested that the regional administrator be both enjoined from disbursing funds under the two grants and required to direct the grantees Rivanna and Seaford to resolicit bids for their respective projects. NHS subsequently amended both complaints in response to the administrator’s contention that the grantees were indispensable to the respective suits. Each amended complaint now prays for a declaration that the administrator’s denial of the NHS protest was contrary to the statute and regulations, and for an injunction against future violations. The administrator has moved to dismiss, arguing alternatively (1) that the respective grantees are indispensable parties and (2) that the court lacks subject matter jurisdiction. The two actions have been consolidated by stipulation for the limited purpose of ruling on the motions to dismiss. For the reasons stated hereafter, I conclude that the actions are moot and that the complaints must be dismissed.

I. THE BACKGROUND OF THE ACTIONS

A. The Rivanna Project

In July or August 1978, after having received, an EPA grant for the construction of a water pollution control facility,2 the Rivanna Water and Sewer Authority (Rivanna) of Charlottesville, Virginia, advertised the project for public bidding. Shortly thereafter, NHS requested and received a complete set of the construction plans and specifications which had been approved by the EPA regional administrator prior to the solicitation of public bids. See generally 40 C.F.R. §§ 35.920-3(c), .935-1, .935-2. Upon examining the specifications, NHS discovered that for particular items of equipment, certain manufacturers had received Rivanna’s specific approval and were so designated in the specifications. NHS was not among the approved suppliers. The specifications required that bidders who wished to use the equipment of nondesignated manufacturers supply additional data about the equipment as well as a warranty bond. In addition, bidders using nondesignated equipment had to “bear the cost of any structural, electrical, mechanical or process alterations or changes required by use of [such equipment].” Amended Complaint (Document No. 10) ¶ 11.

After having lodged informal complaints about the specifications with both Rivanna and the EPA, NHS filed a formal protest with Rivanna on August 22, 1978. The protest alleged that the specifications were unjustifiably exclusionary and discriminatory, and therefore violative of the express intent of Congress in implementing the grant program (as articulated in 33 U.S.C. § 1284(a)(6) (1976)) and of EPA regulations [696]*696(specifically 40 C.F.R. § 35.936-3, -13 (1979)). Rivanna issued an addendum to the .specifications on August 31, 1978. By letter dated September 1, 1978, Rivanna acknowledged the NHS protest and directed NHS to submit its arguments by September 15, 1978. On September 7, 1978, Rivanna received the bids as solicited; on September 15, 1978, NHS filed its written arguments as directed; on September 22, 1978, Rivanna rejected the NHS protest and awarded the construction contract to the low bidder. On September 29, 1978, NHS petitioned the EPA regional administrator for review of Rivanna’s denial of the protest; the Rivanna decision was affirmed by defendant Schramm on November 2, 1978. NHS filed this action for review of the administrator’s determination on December 1, 1978.

B. The Seaford Project

The City of Seaford, Delaware, which had received an EPA grant to improve its wastewater treatment plant, solicited public bids for the project in September 1978. NHS requested and received a complete set of the construction plans and specifications that had previously been approved by the EPA. These specifications required that within certain equipment categories nondesignated suppliers or manufacturers either “have ten years experience in design and operation, or give an undertaking to supply a ten-year performance bond.” Amended Complaint (Document No. 6) ¶ 10(A). Bidders who wished to use the equipment of unnamed manufacturers did so at their risk. Moreover, Seaford could, prior to awarding the contract, require the bidder to substitute the equipment of a designated supplier for that of the unnamed manufacturer listed in the bidder’s proposal. A bidder who failed to comply with Seaford’s substitution would forfeit the bid security. Finally, the bidder had twenty-one hours after the opening of bids to submit additional data so that Seaford’s engineer might determine whether the equipment listed in the bid complied with the project specifications.

On September 22, 1978, NHS filed a formal protest with Seaford, alleging that the specifications were discriminatory and exclusionary in violation of the Federal Water Pollution Control Act and EPA regulations. Seaford did not respond to the NHS protest; Seaford did, however, issue an addendum to the specifications, which reduced the experience or bond requirement to five years and expanded the time for submission of additional data to 48 hours. NHS received the addendum on October 2, 1978; the bids were opened on October 3, 1978. On October 6, 1978, NHS filed an appeal with the regional administrator, advancing in addition to the complaints that had been presented in the protest to Seaford the charge that the timing of the addendum did not afford the bidders sufficient reaction time. The regional administrator affirmed the Seaford procurement action in a determination issued on January 8, 1979, rejecting NHS’ claim of discriminatory specifications and holding that NHS lacked standing to complain of the timing of the addendum. Amended Complaint (Document No. 6) Exhibit B. Seaford subsequently awarded the contract to the low bidder. NHS filed this action for review of the administrator’s determination on February 7, 1979.

II. THE MOTION TO DISMISS

'As I have already noted, the administrator advances in each case two arguments in support of his motion to dismiss: (1) the failure to join an indispensable party (namely, the grantee) and (2) the lack of a justiciable controversy. I will address each argument in turn.

A. The Indispensability Concerns

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510 F. Supp. 292 (E.D. Pennsylvania, 1980)

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Bluebook (online)
482 F. Supp. 693, 1979 U.S. Dist. LEXIS 7746, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-hydro-systems-inc-v-schramm-paed-1979.