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Challenger Transportation, Inc. v. Washington Metropolitan Area Transit Authority

United States District Court, D. Maryland

July 30, 2015



THEODORE D. CHUANG, District Judge.

Plaintiff Challenger Transportation, Inc. ("Challenger") brings this consolidated action against Defendant Washington Metropolitan Area Transit Authority ("WMATA") requesting declaratory and injunctive relief for an allegedly unfairly awarded contract for paratransit services and for WMATA's refusal to release records relating to the contract award process. Pending before the Court are two Motions to Dismiss, which were filed separately in the two related actions before the case was consolidated. The first argues that the protest claims should be dismissed under Federal Rule of Civil Procedure 12(b)(6) for lack of timeliness. Mot. Dismiss, ECF No. 26 (TDC-14-3322). The second argues that the records request claims should be dismissed under Federal Rules of Civil Procedure 12(b)(7) and 19 for failure to join necessary parties. Mot. Dismiss, ECF No. 12 (TDC-14-3463). As the case has since been consolidated, the Court will resolve both Motions to Dismiss in this Memorandum Opinion and accompanying Order. The Court has reviewed the pleadings and the briefs and finds no hearing necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons stated below, both Motions to Dismiss will be DENIED.


WMATA is a mass transit system that spans the Washington, D.C. metropolitan area. It was formed by Congress through an interstate compact (the "WMATA Compact"), which was then adopted by the states of Maryland and Virginia and by the District of Columbia. See Pub. L. No. 89-774, 80 Stat. 1324 (1966); Md. Code Ann., Transp. § 10-204 (West 2015); Va. Code Ann. § 33.2-3100 (West 2015); D.C. Code Ann. § 9-1107.01 (2015). WMATA is therefore an instrumentality of those jurisdictions and enjoys the benefits of such a status. Lizzi v. Alexander, 255 F.3d 128, 131 (4th Cir. 2001), overruled in part on other grounds by Nevada Dep't of Human Res. v. Hibbs, 538 U.S. 721 (2003).

On or about June 1, 2012, WMATA published a request for proposals, RFP No. CQ12169/KAM (the "RFP"), seeking proposals from contractors for the provision of paratransit services for the period from July 1, 2013 until June 30, 2018, with a five-year extension option. In response to the RFP, Challenger submitted a proposal on August 24, 2012. Among the other bidders were Veolia Transportation, Inc. ("Veolia"), First Transit, Inc. ("First Transit"), and Diamond Transportation Services, Inc. ("Diamond"). Challenger alleges that, during the proposal evaluation process, WMATA contacted Veolia, First Transit, and Diamond regarding deficiencies in their proposals and invited them to revise their proposals, but did not offer the same opportunity to Challenger.

On March 1, 2013, WMATA notified Veolia, First Transit, and Diamond that they had been awarded contracts for paratransit services. Seven days later, on March 8, 2013, Challenger received a letter from WMATA notifying it that Challenger would not be awarded a contract. Challenger then requested an agency debriefing, which was held on March 21, 2013. Challenger alleges that, at the debriefing, WMATA informed Challenger that the reasons its proposal was not selected were that its evaluated price was approximately $10 million higher per year than that of Veolia; that Challenger's proposal appeared to be for only a single service delivery level; that the proposal lacked sufficient detail regarding past performance, fare collection, billing, and accounting; and that there was a perceived weakness in Challenger's maintenance plan, safety plan, and severe weather operations plan and capabilities.

On March 26, 2013, Challenger filed a protest with WMATA and the next day submitted a request to inspect and copy public records related to the RFP, pursuant to WMATA's Public Access to Records Policy ("PARP"). Challenger alleges that although WMATA slowly released some records responsive to its PARP request, it failed to produce all of the required information by improperly withholding or redacting records. On February 12, 2014, Challenger filed an appeal of WMATA's PARP response, which resulted in the release of one additional document.

Although WMATA failed to disclose First Transit's price proposal as Challenger requested, Challenger alleges that the documents that were disclosed revealed that Challenger's proposed pricing of $325, 989, 400.69 for the base five-year contract and $410, 351, 610.41 for the five-year extension was, in fact, lower than Veolia's proposed pricing of $406, 550, 668.28 for the base five-year contract and $491, 423, 149.84 for the five-year extension.

On April 10, 2014, Challenger sent a letter to WMATA's Procurement Officer requesting a final decision regarding Challenger's pending protest and asking WMATA to justify its award of the largest contract to Veolia. In response, WMATA issued a denial of Challenger's protest on July 30, 2014.

Challenger subsequently filed suit on August 27, 2014 in the Circuit Court for Montgomery County, Maryland, on the basis of its protest claims (the "protest case"). In the protest case, for which Challenger subsequently filed an Amended Complaint, Challenger alleges that WMATA deviated from the policies laid out in its own 2007 Procurement Procedures Manual ("PPM") by entering discussions with the successful offerors and allowing them to amend their proposals without extending the same privilege to Challenger.[1] PPM § 619.1. In addition, Challenger asserts that WMATA improperly awarded the largest contract to Veolia despite the fact that Veolia's proposal cost millions of dollars more than Challenger's. Challenger also claims that there was a conflict of interest because at the time, WMATA's Chairman of the Board, Thomas Downs, was also the Chairman of the Veolia Board of Advisors. Asserting that the awards contradicted the PPM and were arbitrary, capricious, and lacking in rational basis, Challenger requests declaratory relief and an injunction requiring that the awards be rescinded.

On October 2, 2014, Challenger filed a second suit in the Circuit Court of Montgomery County on the basis of its PARP claims (the "PARP case"), alleging that WMATA unreasonably delayed and redacted the requested documents and asking that the Court grant declaratory relief and enjoin WMATA from withholding the records it had failed to produce.

WMATA removed both cases to this Court on October 22, 2014 and November 3, 2014, respectively, on the basis of the Court's original jurisdiction over the case under the WMATA Compact, Md. Code Ann. Transp. § 10-204(81). WMATA filed two separate Motions to Dismiss: (1) a Motion to Dismiss the protest case (TDC-14-1322) under Federal Rule of Civil Procedure 12(b)(6) based on Challenger's failure to protest its rejection within the five-day period mandated by the PPM, or, in the alternative, its failure to bring the claim within one year of WMATA's award of the contract to the other offerors, which WMATA argues was required under Maryland law; and (2) a Motion to Dismiss the PARP case (TDC-14-3463) under Rules 12(b)(7) and 19 for failure to join the other successful offerors as necessary parties.

On December 17, 2014, at the parties' request, the Court consolidated the two cases. The Court now addresses both Motions to ...

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