On February 1, 1983, the House defendants' motion to dismiss the complaint was argued before Judge Smith and taken under advisement.

On February 3, 1983, Judge Smith handed down a memorandum opinion granting the defendants' motion to dismiss the complaint. [United States v. The House of Representatives of the United States, 556 F. Supp. 150 (D.D.C. 1983)] Judge Smith held that it would be an improper exercise of the discretion granted to the court by the Declaratory Judgment Act, 28 U.S.C. $ 2201, to entertain the case, pointing out that the challenge to the Congressional contempt citation could be decided in the context of the criminal contempt proceedings. He reasoned:

The statutory provisions concerning penalties for contempt of Congress, 2 U.S.C. $ 192 and 3194, constitute "an orderly and often approved means of vindicating constitutional claims arising from a legislative investigation." Sanders v. McClellan, 463 F.2d 894, 899 (D.C. Cir. 1972). Under these provisions, constitutional claims and other objections to congressional investigatory procedures may be raised as defenses in a criminal prosecution. See Barenblatt v. United States, 360 U.S. 109, 79 S. Ct 1081, 3 L.Ed.2d 1115 (1959); Ansara v. Eastland, 442 F.2d 751 (D.C. Cir. 1971); United States v. Tobin, 306 F.2d 270, 276 (D.C. Cir. 1962). Courts have been extremely reluctant to interfere with the statutory scheme by considering cases brought by recalcitrant witnesses seeking declaratory or injunctive relief. See, e.g. Eastland v. United States Servicemen's Fund, 421 U.S. 491, 95 S. Ct. 1813, 44 L. Ed. 2d 324 (1975); Ansara v. Eastland, 442 F. 2d at 754. Although the Court of Appeals for this Circuit has entertained one civil action seeking to block compulsory legislative process, that action was brought by the Executive Branch to prevent a private party from complying with a congressional subpoena. See United States v. American Telephone and Telegraph Company, 551 F. 2d 384 (D.C. Cir. 1976). Significantly, therefore, in that case the Executive Branch was not able to raise its claim of executive privilege as a defense to criminal contempt proceedings.

Courts have a duty to avoid unnecessarily deciding constitutional issues. United States v. Rumely, 345 U.S. 41, 4546, 73 S. Ct. 543, 545-546, 97 L. Ed. 770 (1952). When constitutional disputes arise concerning the respective powers of the Legislative and Executive Branches, judicial intervention should be delayed until all possibilities for settlement have been exhausted. See United States v. American Telephone and Telegraph, 551 F.2d at 393-395. Judicial restraint is essential to maintain the delicate balance of powers among the branches established by the Constitution. See id. Since the controversy which has led to United States v. House of Representatives clearly raises difficult constitutional questions in the context of an intragovernmental dispute, the Court should not address these issues

until circumstances indicate that judicial intervention is

necessary. [556 F. Supp. at 152] Judge Smith urged the parties to settle their differences without further judicial involvement. He did not address the additional grounds for dismissal raised by the House defendants.?

StatusThe case is pending in the U.S. District Court for the District of Columbia. As of March 1, 1983, the time for filing an appeal had not yet expired.

The complete transcript of the February 1, 1983 oral argument before Judge Smith is reprinted in the “Related Materials” section of this report at page 777.

The complete text of the February 3, 1983 memorandum of the district court is printed in the "Decisions" section of this report at

page 679.

XII. Congressional Interference With the Administrative or

Judicial Process
Peter Kiewit Sons' Co. v. U.S. Army Corps of Engineers

No. 82–1461 (D.C. Cir.) On December 29, 1981, Peter Kiewit Sons' Co. ("Kiewit") filed a verified complaint, an application for a temporary restraining order, and a motion for a preliminary injunction in the U.S. District Court for the District of Columbia. (Civil Action No. 81-3192) Named as defendants were the U.S. Army Corps of Engineers (“Corps”), the Department of the Army (“Army'), and the Department of Defense ("'DOD").

In its complaint, Kiewit described itself as a Nebraska based construction firm which for many years derived a substantial portion of its income through the performance of U.S. Government contracts, principally defense contracts. However, said the complaint, on August 19, 1981, the Corps (which has procurement responsibility for many military construction projects) issued an internal directive to all its divisions, informing them that henceforward Kiewit was to be deemed ineligible for all future military contracts. The immediate effect of the directive, said the complaint, was to deny Kiewit the contract to perform construction at Barber's Point Harbor, Hawaii, despite the fact that Kiewit had been the low bidder. Then, at some point during autumn 1981, the Corps reversed its decision and decided to award the Barber's Point contract to Kiewit. Nonetheless, the Corps' efforts to award the contract to Kiewit "were blocked by higher authorities, either in the Army or DOD, because of the politically charged nature of the matter resulting from direct questioning of top DOD officials at a Congressional hearing on July 28, 1981, and consequent concern of Congressional and public relations." [Complaint, December 29, 1981, || 11] During that Congressional hearing, continued the complaint, DOD officials were "sternly criticized for contracting with fifteen contractors who had been the subject of prosecutions for anti-competitive practices in connection with Missouri River bank

? In dicta, Judge Smith did state that the U.S. Attorney was required to bring a duly certified contempt resolution to the grand jury. (Id. at 151]

stabilization procurements prior to 1976.(Id., 120] Although admitting that it had pled nolo contendere to one count under the Sherman Act, Kiewit, in its complaint, stated that under the applicable laws and regulations Kiewit's conviction did not, ipso facto, require its debarment from receiving Government contracts. Despite those laws and regulations, continued the complaint, Kiewit was advised by the Corps on December 16, 1981 that its Barber's Point bid was being rejected, and that the award would be made to the next lowest bidder. In response to Kiewit's protest, said the complaint, the Corps stated that Kiewit's suspension was mandated by a notice of proposed debarment (because of the Sherman Act conviction) dated December 10, 1981 and issued by the Judge Advocate General of the Army. The Corps then postponed the actual granting of the award until December 30, 1981, in order that Kiewit might have time to pursue its claims in court. That December 10th notice, said the complaint, was based on a misconception of the law, was improperly made retroactive to cover the Barber's Point bid, and, in any event, by its very terms did not require the Corps to debar Kiewit from participating in future contracts. The result of all this, claimed Kiewit, was that it had been the victim of a de facto debarment since August 19, 1981. This debarment was allegedly effected without notice and without any opportunity for a hearing on the issues. Thus, absent judicial relief, Kiewit would be required “to endure additional periods of de facto debarment without an opportunity to be heard and have its evidence considered.” (Id., [18]

According to Kiewit, the anticipated award of the Barber's Point contract to someone other than Kiewit would constitute a denial of Kiewit's due process rights in that it would be based on a debarment effectuated without Kiewit's first having had an opportunity to be heard. Moreover, the anticipated award would represent “an abdication of agency discretion" in that it would be based on an "unwarranted concern for Congressional relations." (Id., 136]

By way of relief, Kiewit sought a declaratory judgment that the company: (1) could not be denied the Barber's Point contract; (2) could not be denied, without a hearing, any contract on which it was the responsive low bidder; (3) was subjected to arbitrary and capricious actions by the defendants; and (4) could not be denied any contract where unwarranted reactions to Congressional criticism served to overturn the discretionary judgment of the procuring agency. The complaint further requested the issuance of: (1) a temporary restraining order and preliminary injunction to maintain the status quo pendente lite; and (2) a permanent injunction prohibiting the defendants from denying Kiewit the Barber's Point contract or, without a hearing, any other contract on which it was the low bidder.

In its memorandum of points and authorities in support of its application for a temporary restraining order and motion for a preliminary injunction, plaintiff Kiewit stated that in Washington Metropolitan Area Transit Commission v. Holiday Tours, 559 F. 2d 841, 844 (D.C. Cir. 1977), the court set forth the standard for granting preliminary injunctive relief as follows:

An order maintaining the status quo is appropriate when a serious legal question is presented, when little if any harm will befall other interested persons or the public and when denial of the order would inflict irreparable injury on the movant. [Memorandum of Points and Authorities in Support of Plaintiff's Application for Temporary Restraining Order and Motion for Preliminary In

junction, December 29, 1981, at 1] In applying that standard to the instant case, and in arguing that all of the Holiday Tours criteria had been met, the plaintiff stated that it wished to make clear "that it does not criticize or object to the Congressional oversight process. Kiewit is confident that no Congressional source would wish the Defendants to freeze all awards to Kiewit without examining specific responsibility questions ...." [Id. at 11 (emphasis in original)] Instead, said Kiewit, the Congressional criticism of the defendants should be viewed as “one explanation” for the defendants' irrational behavior.

On December 30, 1982, the application for a temporary restraining order was argued before Chief District Judge William B. Bryant and granted. One week later, the case was transferred to District Judge Charles R. Richey who scheduled the hearing on the preliminary injunction for January 18, 1982.

On January 13, 1982, the defendants filed a memorandum in opposition to the plaintiff's motion for a preliminary injunction. In it they argued that Kiewit's request for a preliminary injunction should be denied because Kiewit had failed to make a strong showing of a likelihood of success on the merits and because the injunction's harm to the Government and the public would outweigh the harm alleged by Kiewit. Specifically, the defendants claimed that the August 19th instruction did not constitute a debarment, de facto or otherwise. Rather, the instruction merely "held in abeyance pending review of debarment reports currently being prepared” all contracts with firms convicted of anti-trust violations in connection with the Missouri River bank affair. [Memorandum of Points and Authorities . . ., January 13, 1981, at 3] Even assuming, said the defendants, that the plaintiff should have been given an opportunity to contest its suspension, “the December 10, 1981 notice and subsequent events did operate to cure any prior due process defects.(Id. at 9-10) Thus, none of Kiewit's constitutional rights were violated. Moreover, said the defendants, the award of the Barber's Point contract to the next lowest bidder was conducted in conformity with due process, since Kiewit had been given a chance to respond to the allegations against it prior to the awarding of the contract to another firm; in fact, Kiewit's debarment hearing commenced on January 5, 1982. Finally, the defendants maintained that the public interest would be severely damaged if through judicial action the commencement of work on the Barber's Point contract was delayed, since the contract was important to the national defense.

On January 15, 1982 the Government consented not to award the Barber's Point contract, pending a court hearing on the merits, scheduled for February 2, 1982. Meanwhile, pursuant to a court order of January 18, the parties were involved in attempts to negotiate a settlement.

On February 1, 1982, the court held a pretrial conference during which it requested that the parties submit memoranda on the question of whether the court had jurisdiction to hear the case. Basically, the issue was whether judicial resolution of the action would be unnecessary and premature, given the fact that formal administrative debarment proceedings against Kiewit were then underway. The parties submitted the requested memoranda the following day, with Kiewit arguing vehemently that the court should not sanction the perpetuation of the "blacklisting” of Kiewit by awaiting the outcome of the administrative proceeding.

The negotiations having failed, the court, on February 2, 1982, heard oral arguments on the plaintiff's motion for a permanent injunction.

On February 26, 1982, Judge Richey issued his decision (Peter Kiewit Sons' Co. v. U.S. Army Corps of Engineers, 534 F. Supp. 1139 (D.D.C. 1982)]. The motion for a permanent injunction was granted, and the Barber's Point contract was awarded to Kiewit. In examining the facts of the case, Judge Richey found that the defendants' actions were unlawful for a variety of reasons. First, and primarily, Judge Richey held that Kiewit was entitled to relief because the August 19th directive constituted a de facto debarment which deprived the plaintiff of its right to due process of law. Furthermore, the judge ruled that the "impropriety of Defendants' failure to provide Kiewit with the requisite notice and opportunity to be heard for more than four months was not cured by the after-the-fact issuance of notice of proposed debarment dated December 10, 1981, or by the debarment hearing held on January 5, 1982.” [Id. at 1154, citations omitted] Judge Richey then listed "alternative" reasons why the plaintiff was entitled to relief. The denial of the Barber's Point contract, said Judge Richey, not only violated due process but also: (1) constituted an improper penalty; (2) was arbitrary and capricious; and (3) was the product of administrative abdication of responsibility and improper Congressional interference.

On the issuance of Congressional interference, Judge Richey said, "The denial of the Barber's Point contract award has resulted from a sequence of events beginning with criticism of the Corps of Engineers from Congressional sources for its decision to continue doing business with Kiewit and 15 other contractors who had been convicted of anticompetitive practices ...." [Id. at 1143] For example, said the Judge, top DOD officials were involved in the following exchange with Senator Carl Levin of Michigan at the July 28, 1981 Congressional hearing:

Senator LEVIN. I want to go back to another case which is the debarment by another agency which should be presumptively binding on you other than for compelling reasons. In the case of the Engineering Corps, again I said there were 15 companies, nine individuals convicted of bid rigging against the Army Corps of Engineers. Since the date of indictment $250 million in contracts were awarded. Listen to this. Since the date of conviction, $81 million in new contracts has been awarded. One contract for $31 mil

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