# Petition for Writ of Certiorari — National Park Hospitality Association v. Department of the Interior

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2003
- **Citation:** 538 U.S. 803

## Text

meme Cour, US,
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No. OFFICE OF THE OLERK

Jn the Supreme Court of the Gnited States

NATIONAL PARK HOSPITALITY ASSOCIATION,
Petitioner,

V.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL.
Respondents.

On Petition for a Writ of Certiorari to
the United States Court of Appeals
for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

KENNETH S. GELLER
Counsel of Record
RICHARD B. KATSKEE
DAVID M. GOSSETT
Mayer, Brown, Rowe & Maw
1909 K Street, NW
Washington, DC 20006
(202) 263-3000

Counsel for Petitioner

02 196 Aue 62002

|.)

QUESTION PRESENTED

Whether the Contract Disputes Act of 1978, 41 U.S.C.
§§ 601-613, applies to contracts between the National Park
Service and private parties for the development, operation,
and maintenance of concessions, such as restaurants, lodges,
and gift shops, in the national parks.

i as es

il
RULE 14.1(b) STATEMENT

In addition to the National Park Hospitality Association,
plaintiffs/appellants in the court of appeals (in four consoli-
dated cases) were Amfac Resorts L.L.C. (since renamed
Xanterra Parks and Resorts L.L.C.), ARAMARK Sports and
Entertainment Services, Inc., and Hamilton Stores, Inc. In
addition to the United States Department of the Interior, re-
spondents are Gale Norton, Secretary of the Interior, Fran P.
Mainella, Director of the National Park Service, and Dela-
ware North Park Services, Inc. (which intervened as a defen-
dant in this and one of the consolidated cases).

RULE 29.6 STATEMENT

The National Park Hospitality Association (“NPHA”) is a
non-profit trade association that has no parent corporations or
stock. The NPHA represents concessioncrs who operate con-
cessions, such as restaurants, lodges, recreational services,
and gift shops, in the national parks.

TABLE OF CONTENTS
Page
QUESTION PRESENTED .............:c:scsccccececececoccesesesesecsseseeeses I
RULE 14.1(b) STATEMENT .00.0.......cccccccccccccscsescscerseseevseseees li
RULE 29.6 STATEMENT .............cccccccccesescecececcecersceseceeceeeees ii
TABLE OF AUTHORITIES. ................cccccccceccccececesescsesessees iv
ce l
ET ae l
STATUTORY AND REGULATORY PROVISIONS
ES Ee l
I aa 2
REASONS FOR GRANTING THE PETITION ................... 8
A. The Decision Below Is Clearly Incorrect And
Is Contrary To The Views Of The
Comptroller General And The Department Of
Interior’s Own Board Of Contract Appeals. .............. 8
B. The Decision Below Creates A Conflict In
The Circuits On Whether The Contract
Disputes Act Applies To Concessions
ae 16
C. The Issue Presented Here Is Of Substantial
Practical Importance. ...............ccccccccccsseeeeseeeeeeeeereeeees 18
ee 21

(IIT)

1V
TABLE OF AUTHORITIES
Page(s)

CASES
Canadian Aviator, Ltd. v. United States,

es Se cniteitnnnciciniininieticiiinmamniaainmmmrnaientinnagss 12
Grunley Constr. Co., ENGBCA No. 6327, 99-1 BCA

§ 30,138, 1998 WL 835156 (Nov. 20, 1998) ................ 11

Harry Pohl KG, ASBCA No. 51523, 01-1 BCA
7 31,329, 2001 ASBCA LEXIS 40 (Feb. 28,

Home Entm't, Inc., ASBCA No. 50791, 99-2 BCA
§ 30,550, 1999 ASBCA LEXIS 126 (Aug. 23,

STE serccsntenntsienaiiniiadinisniihnaniaitiniieiniitaiitiantantiaibsiaabisetianinians 20
J.E.M. AG Supply, Inc. v. Pioneer Hi-Bred

Py ER 12
Libra Eng'g Inc., NASABCA Nos. 1182-17 et ai.,

1984 WL 13526 (July 13, 1984) 200.0... ccceeeeeeeeeeeeee 11
Nat'l Park Concessions, Inc., IBCA No. 2995, 94-3

BCA § 27,104, 1994 WL 462401 (Aug. 18, 1994)....... 12

Niko Contracting Co. v. United States,
39 Fed. Cl. 795 (1997), aff'd, 173 F.3d 437

Ga, Gao. CD Ga recnctenscrcscssscccssnsicnsesvscsssssenseseces 11
Oroville-Tonasket Irrigation Dist. v.

United States, 33 Fed. Cl. 14 (1995) .............-.0++ 4, 18, 20
Pound v. United States, No. 94-496C,

slip op. (Fed. Cl. Aug. 30, 1996)...........-...c00s++ 15, 16, 20
R & R Enters., IBCA No. 2417, 89-2 BCA

q 21,708, 1989 WL 27790 (Mar. 24, 1989)...............0-+- 12

er

ie me + -

Vv

TABLE OF AUTHORITIES -— continued

Page(s)

Senor Tenedor, S.A. de C.V., ASBCA Nos. 48502
et al, 97-2 BCA 4 29,192, 1997 ASBCA LEXIS
ED Cis BU connesnnsensnsnssemmmsemnennsnsessnemesemmnaente 20

Starfleet Marine Transp., Inc., B-290181,
2002 U.S. Comp. Gen. LEXIS 90 (July 5,

Sirti icaasahiathdeteincasatipiueieniaiienatatteadeaiaaiaeininenbasatashriatiaiainiibi intact 14, 15
Stephen Sloan Marine Corp., B-234219, 89-1

eR 13
Total Med. Mgmt., Inc. v. United States,

104 F.3d 1314 (Fed. Cir. 1997)................... 16, 17, 18, 20
Total Procurement Services, Inc., B-255934.3,

1994 WL 450445 (Aug. 16, 1994) o.oo eccccecceeeeees 13
United States v. Rodgers, 466 U.S. 475 (1984) ..........cc0000+ 12
United States v. Utah Constr. & Mining Co.,

ET irtecrsennuunenebeninienmennnine 20

Watch Hill Concessions Inc., IBCA No. 5284-2000,
01-1 BCA 4 31,298, 2001 WL 170911 (Feb. 16

Ee eee Ee 12, 13
West Coast Copy, Inc.; B-254044.2,

1993 WL 476970 (Nov. 16, 1993) ..........c.ccccceesecesereeees 14
Yosemite Park & Curry Co. v. United States,

$82 F.2d 552 (Ct. Cl. 1978)...............00..00.... 11, 16, 17, 18
YRT Services Corp. v. United States, 28 Fed. Cl. 366

Sissies erase etderientinaasiaaaia 13, 15

STATUTES, RULES AND REGULATIONS

An Act to Establish a National Park Service,
Oe +

vi

TABLE OF AUTHORITIES -— continued

Page(s)

SP OE consenenssennsnnnnnnennmmanmennerenenmnnnenieanins passim
National Parks Service Concessions Policy Act,

Pub. L. No. 89-249, 79 Stat. 969 (1965) ........0..0..... 2,5

ee 5
National Parks Omnibus Management Act of 1998,

Pub. L. No. 105-391, 112 Stat. 3497 00. ee eceeeeeees 5

Ses UTI cintrinenementennnnmmnmnnneeemaieeneei passim

eee Sir UNE cisdernsieeesventintenmnemnenstantenenncenmmemsiasts 6, 9,17

is Or ee cdinrecenseinsensernseenenmiantesemenitneninanentinnies 10
Ee l
Competition In Contracting Act of 1984,

Pub. L. 98-369, 98 Stat. 1175 (codified at 31

U.S.C. §§ 3551-3556, 41 U.S.C. § 253)... ce cececeeeeeee 13

I 15

ee ee I cerrettenetevsintcieinednmnmmanninnenniannmensnaien 15
ie EE cnasnrinnesrentnennsnenuninnenininnnnnemeienteaienn 12
ee 12
Contract Disputes Act, 41 U.S.C. § 601-613 ............... passim

Op le 0 cciennsccnenieentansnernnesensnnenteneanemeincnss passim

ey es Se crcnnnnsrennenanenmncenienen 3

ls Oe crmetgrerenncnnreneeemmeneeinimnnns 3

GD ie Oe cneeesnnnemnnnmemene 3, 7,13

GB ie Oe crrneerrememnrsinienmenginenens 4,13

RR APT LA a 4

Se ee eee

vil

TABLE OF AUTHORITIES — continued

Page(s)

Concession Contracts, 64 Fed. Reg. 20,630

(April 17, 2000) (codified at 36 C.F.R. pt. 51)........ 4, 5,6

8 Re 2, 6, 7, 12
Standard Concession Contract, 65 Fed.

Reg. 26,052 (May 4, 2000).............ccccccsseeeeeeeeeeeees 6,9, 10
MISCELLANEOUS
aie incited iaeectleaniniiins 3

C. Kipps, T. KINDNESS, & C. HAMRICK, The Contract
Disputes Act: Solid Foundations, Magnificent
System, 28 PuB. CONT. L.J. 585 (1999) .............000 19, 20

Encourage Contracting Out of Federal Services: A
Legislative Hearing on H.R. 3832, The Services
Acquisition Reform Act of 2002 (SARA), Before
the Subcomm. on Technology and Procurement
Policy, House Comm. on Gov't Reform, 107th

Oe 18
S. REP. No. 89-765, 1965 U.S.C.C.A.N. 3489.........:cccccseeeees 5
S. REP. No. 95-1118, 1978 U.S.C.C.A.N.

Fae ceserensnimnaserteeennmemenseenennuennsemmmenneonmeenans 3, 19, 21

- ~~ ame

PAE tens Mw tm

PETITION FOR A WRIT OF CERTIORARI

Petitioner, the National Park Hospitality Association
(“NPHA”), respectfully petitions for a writ of certiorari to
review the judgment of the United States Court of Appeals
for the District of Columbia Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a-34a)
is reported at 282 F.3d 818. The Memorandum Opinion of
the district court addressing the issue before this Court (App.,
infra, 35a-92a) is reported at 142 F. Supp. 2d 54. Other opin-
ions issued by the district court are reported at 143 F. Supp.
2d 7 and 150 F. Supp. 2d 96.

JURISDICTION

The judgment of the court of appeals was entered on
March 1, 2002, and a timely petition for rehearing was de-
nied on May 8, 2002 (App., infra, 93a-94a). The jurisdiction
of this Court is invoked under 28 U.S.C. § 1254(1).

STATUTORY AND REGULATORY
PROVISIONS INVOLVED

Section 3(a) of the Contract Disputes Act of 1978, 41
U.S.C. § 602(a), provides:
(a) Unless otherwise specifically provided herein,
this chapter applies to any express or implied con-
tract (including those of the nonappropriated fund
activities described in sections 1346 and 1491 of Ti-
tle 28) entered into by an executive agency for —

(1) the procurement of property, other than real
property in being;
(2) the procurement of services;

(3) the procurement of construction, alteration,
repair or maintenance of real property; or,

2

(4) the disposal of personal property.
36 C.F.R. § 51.3 provides in relevant part:

A concession contract (or contract) means a binding
written agreement between the Director [of the Na-
tional Park Service] and a concessioner entered un-
der the authority of this part or the [National Park
Concessions Policies Act of 1965, Pub. L. No. 89-
249] that authorizes the concessioner to provide cer-
tain visitor services within a park area under speci-
fied terms and conditions. Concession contracts are
not contracts within the meaning of 41 U.S.C. 60] et
seq. (the Contact Disputes Act) and are not service
or procurement contracts within the meaning of
statutes, regulations or policies that apply only to
federal service contracts or other types of federal
procurement actions.

(second emphasis added).
STATEMENT

This case concerns the applicability of the Contract Dis-
putes Act of 1978 (“CDA”) to concessions contracts, and in
particular to contracts between the National Park Service
(“NPS”) and the private concessioners who contract to pro-
vide visitor services and to operate and maintain facilities in
the national parks. The language of the CDA broadly covers
all contracts entered into by a federal agency for the pro-
curement of personal property, services, or the repair and
maintenance of real property. Despite the CDA’s breadth, the
NPS has asserted by regulation that the statute does not apply
to its concessions contracts. In upholding that regulation, the
District of Columbia Circuit disagreed with the Federal Cir-
cuit’s interpretation of the CDA and ignored the views of the
Department of the Interior’s own Board of Contract Appeals.
Furthermore, the Comptroller General has specifically ques-
tioned the D.C. Circuit’s reasoning.

el el Eo A

3

As Congress recognized when it passed the CDA, “[h]ow
[government] procurement functions has a far-reaching im-
pact on the economy of our society and on the success of
many major Government programs.” S. REP. NO. 95-1118, at
4, 1978 U.S.C.C.A.N. 5235, 5238. Given the importance of
the CDA to government contracting — and the court of ap-
peals’ cramped interpretation of the scope of this important
federal statute — review by this Court is plainly warranted.

1. The Contract Disputes Act of 1978, Pub. L. No. 95-
563, 92 Stat. 2383, 41 U.S.C. §§ 601-613, on its face applies
to all government contracts for “the procurement of services”
or “the procurement of construction, alteration, repair or
maintenance of real property.” 41 U.S.C. § 602(a)(2)-(3).
The statute was designed to replace a system of dispute reso-
lution procedures based on “[t]he predilections of different
agencies” (S. REP. No. 95-1118, at 3) that was “often too ex-
pensive and time consuming for the efficient and cost-
effective resolution of small claims and, on the other hand,
often fail{[ed] to provide the procedural safeguards and other
elements of due process that should be the rights of litigants”
(id. at 4). Thus, the CDA has “broad application in order to
unify the diverse and often inconsistent procedures presently
existing among the many procuring agencies.” Jd. at 17.

The CDA “provides a fair, balanced, and comprehensive
statutory system of legal and administrative remedies in re-
solving Government contract claims.” /d. at 1; see also H.R.
REP. No. 95-1556, at 5. Under the CDA, parties contracting
with the government have a number of important procedural
and substantive rights. The CDA establishes that all claims
“relating to” a contract covered by the CDA are subject to the
Act’s administrative dispute processes. See 41 U.S.C.
§ 605(a). Those processes provide contractors with neutral
arbiters to review decisions reached by the agency’s contract-
ing officer. In particular, the contractor has the choice either
to appeal any decision to the agency’s “Board of Contract
Appeals” (see 41 U.S.C. §§ 606, 607)) or to remove the mat-

4

ter to the Court of Federal Claims (see 41 U.S.C.
§ 609(a)(1)), which is statutorily required to review the
agency’s decision “de novo” (41 U.S.C. § 609(a)(3)). Sub-
stantively, a major advantage of the CDA over the hodge-
podge of dispute-resolution schemes it replaced is that
contractors are entitled to interest on any amount found due
to them on their claims. See 41 U.S.C. § 611; Oroville-
Tonasket Irrigation Dist. v. United States, 33 Fed. Cl. 14, 23
n.3 (1995).

2. The NPS was created in 1916 “to oversee our national
parks and to ‘conserve the scenery and the natural and his-
toric objects and the wild life therein and * * * provide for
the enjoyment of the same.”” App., infra, 49a (quoting 16
U.S.C. § 1 (omission in original)). In the Act creating the
NPS, “Congress authorized the Interior Secretary to ‘grant
privileges, leases, and permits for the use of land for the
accommodation of visitors’ to each of the ‘various parks,
monuments, or other reservations’ under the Secretary’s au-
thority.” App., infra, 2a (quoting An Act to Establish a Na-
tional Park Service, ch. 408, 39 Stat. 595 (1916)).

“[Pjrovid[ing] for the enjoyment” of the national parks
(16 U.S.C. § 1) generally requires that visitors both be of-
fered various services throughout the parks and be provided
access to facilities, such as lodges, restaurants, and retail out-
lets, where those services are delivered. Because the gov-
ernment has been unable or unwilling to undertake on its own
behalf the huge financial burdens and other responsibilities
associated with the provision of these visitor services and
facilities, throughout its history the NPS has relied on private
concessions contractors to build, maintain, and operate its
visitor-service facilities and to provide many of the other ser-
vices that the public typically associates with a national park,
such as outfitter and guide services. See App., infra, 49a
(NPS has always “relied on private concessioners for the
provision of ‘lodging, food, merchandising, transportation,
outfitting and guiding, and similar activities.””) (quoting 64

5

Fed. Reg. 20,630 (Apr. 17, 2000)). The national parks con-
cessions program, therefore, historically has been a partner-
ship between the NPS and concessions contractors to develop
and provide access to the national parks for the enjoyment of
the public.

Between 1916 and 1965, there was no specific statutory
scheme governing the relationship between the NPS and the
concessioners that contracted to provide visitor services in
the national parks. In light of growing industry and govern-
mental concern about the NPS’s concessions-contracting
policies (see App., infra, 3a-4a), Congress enacted the Na-
tional Park Service Concessions Policy Act (“1965 Act”),
Pub. L. No. 89-249, 79 Stat. 969 (1965), to govern conces-
sions contracts. The 1965 Act basically codified preexisting
NPS concession policy. See S. REP. No. 89-765, 1965
U.S.C.C.A.N. 3489, 3489 (principal purpose of the 1965 Act
was “to put into statutory form policies which * * * have
heretofore been followed by the [NPS] in administering con-
cessions”). Among other things, the 1965 Act afforded con-
cessioners a preferential right of renewal for their
concessions contracts (16 U.S.C. § 20d) and authorized the
NPS to grant other specified contractual inducements for
making investments in the national parks. See App., infra,
4a, 50a-5la. In exchange, “[c]loncessioners paid the govern-
ment a franchise fee * * * for the privilege of operating on
federal land.” Jd. at 4a.

In 1998, Congress repealed the 1965 Act and passed a re-
placement statute, the National Parks Omnibus Management
Act of 1998 (“1998 Act”), Pub. L. No. 195-391, 112 Stat.
3497 (codified with certain exceptions at 16 U.S.C. §§ 5951-
5966). The 1998 Act altered various technical aspects of the
system under which the NPS enters into private concessions
contracts io provide visitor services in the national parks. The
1998 Act sought to further the mission of the national park
system by protecting the parks for the future while ensuring
that the agency continued to provide the appropriate “ac-

6

commodations, facilities, and services” that are “necessary
and appropriate for public use and enjoyment.” See 16
U.S.C. § 5951(b)(1). In particular, the 1998 Act specified that
the NPS “shall utilize concessions contracts to authorize a
person, corporation, or other entity to provide accommoda-
tions, facilities, and services to visitors to units of the Na-
tional Park System.” 16 U.S.C. § 5952.

The NPS has since issued regulations implementing the
1998 Act (see Concession Contracts, 65 Fed. Reg. 20,630
(Apr. 17, 2000) (codified at 36 C.F.R. pt. 51)), as well as a
model “Standard Concession Contract” (65 Fed. Reg. 26,052
(May 4, 2000)). The regulations declare that:

Concession contracts are not contracts within the
meaning of 41 U.S.C. 601 et seq. (the Contact Dis-
putes Act) * * *.

36 CFR. § 51.3.

3. In November and December 2000, the National Park
Hospitality Association (“NPHA”), a non-profit trade asso-
ciation that represents many concessioners who do business
in the national parks, and three individual concessioners filed
separate actions challenging aspects of the NPS regulations
and Standard Concession Contract. Among other claims, the
NPHA and the individual plaintiffs (collectively, “NPHA”)
challenged 36 C.F.R. § 51.3 as being contrary to the CDA.
The NPHA alleged that the regulation improperly excluded
NPS concessions contracts from the CDA, despite (1) the
CDA’s plain language, legislative purpose, and legislative
history; (2) contrary decisions of the Federal Circuit and its
predecessor (the Court of Claims); (3) contrary decisions of
the Court of Federal Claims and the Department of Interior’s
Board of Contract Appeals (“IBCA”); (4) the position taken
by the NPS in at least one prior reported decision on a con-
cessions-contract dispute; and (5) the obvious consequent
ability, if the regulation were upheld, of virtually any agency
to circumvent the CDA.

ee ee ee ee ee

7

The cases were consolidated in the district court. On May
23, 2001, the court granted summary judgment in the NPS’s
favor in most respects, and in particular held that the CDA
does not apply to concessions contracts. See App., infra,
68a-72a. The district court acknowledged that in an NPS
concessions contract “the government is receiving services”
and “is contracting for the provision of amenities to the visi-
tors of its national parks” (id. at 68a), thus fulfilling its statu-
tory obligation to accommodate visitors (see generally 16
U.S.C. §§ 1, 5951). The court also acknowledged that “be-
cause the concession contracts contain various terms relating
to the stewardship of concession areas, * * * it can be said
that the government is also bargaining for the maintenance of
real property.” App., infra, 68a. Despite these conclusions,
the court determined that the CDA is ambiguous as to
whether it applies to concessions contracts. See id. at 68a-
69a. The court then afforded Chevron deference to the NPS
and concluded that 36 C.F.R. § 51.3 was a permissible inter-
pretation of the CDA. See App., infra, 70a.

The court of appeals affirmed. At the outset, the court of
appeals held that the district court’s rationale was erroneous:
the NPS “does not administer the Contract Disputes Act, and
thus may not have interpretative authority over its provi-
sions.” App., infra, 27a.' Accordingly, the court of appeals
agreed with the NPHA that the agency was not entitled to
Chevron deference in its interpretation of the CDA. Never-
theless, the court upheld the determination that the CDA does
not apply to concessions contracts:

The primary purpose of concessions contracts is to
permit visitors to enjoy national parks in a manner
consistent with preservation of the parks. 16 U.S.C.

' Congress explicitly granted authority to implement and inter-
pret the CDA to the Administrator of the Office of Federal Pro-
curement Policy, not to the Secretary of the Interior. See 41
U.S.C. § 607(h).

8

§ 5951. That the government receives monetary
compensation or incidental benefits from the con-
cessioners’ performance is not enough to sweep
these contracts into the ambit of the Contract Dis-
putes Act.

Id. at 29a. In the D.C. Circuit’s view, concessions contracts
do not fall within the CDA because their purpose is to benefit
“park area visitors,” rather than the government. /d. at 27a.

REASONS FOR GRANTING THE PETITION

The Contract Disputes Act was enacted both to standard-
ize the federal government’s contracting policies and to en-
sure that those who contract with the government receive fair
treatment. The decision below that the CDA is inapplicable
to government contracts that procure goods or services for
the benefit of third parties, rather than for the government
itself, cannot be squared with the plain language of the CDA
and creates a gaping hole in the coverage of this important
federal statute. In addition, the decision is in direct conflict
with the decisions of the Federal Circuit and its predecessor,
the Court of Claims, and has been rejected or questioned by
the Department of Interior’s own Board of Contract Appeals

and by the Comptroller General. Further review is plainly
warranted.

A. The Decision Below Is Clearly Incorrect And Is
Contrary To The Views Of The Comptroller
General And The Department Of Interior’s Own
Board Of Contract Appeals.

The D.C. Circuit’s construction of the Contract Disputes
Act is demonstrably incorrect. The CDA on its face applies
to any “express or implied contract” entered into by “an ex-
ecutive agency” for “the procurement of” either “services” or
the “construction, alteration, repair or maintenance of real
property” (41 U.S.C. § 602(a)(2)-(3)), unless the CDA “spe-
cifically provide[s]” otherwise. Jd. § 602(a). The NPS does

* ON re OE a ee
;

9

not deny that concessions contracts are “contracts” and that it
is an “executive agency,” nor does it claim that the CDA it-
self specifically exempts these contracts. Thus, the NPS is
left to assert that concessions contracts entail neither the pro-
curement of services nor the procurement of construction,
repair, or maintenance of real property. However, conces-
sions contracts are manifestly of both these sorts.

1. The NPS plainly “procur[es] services” when it con-
tracts with a concessioner. The NPS has a statutory duty to
provide “accommodations, facilities, and services that nis .
are necessary and appropriate for public use and enjoyment
of the national parks. 16 U.S.C. § 5951(b)(1); see also 16
U.S.C. § 1. Rather than undertaking these tasks itself, the
NPS discharges its statutory duty by procuring the services of
contractors who, subject to pervasive regulation and supervi-
sion by the agency, provide visitor services, staff park facili-
ties, construct, maintain, and repair federally-owned
structures, and perform related functions that promote the
public’s use and enjoyment of the national parks. For exam-
ple, under section 3(a)(1) of the Standard Concession Con-
tract, 65 Fed. Reg. at 26,064, the NPS lists for each contract
the “visitor services” that the concessioner “is required to
provide * * * during the term of” the contract. Similarly, sec-
tion 10(a) of the Standard Concession Contract provides that
concessioners “shall be solely responsible . on
repairs, housekeeping, and groundskeeping for onces-
sion Facilities ar satisfaction of the Director.” Id. at
26,068-26,069. Plainly, the NPS is procuring these services
from concessioners.

That visitors to the national parks enjoy a benefit from
concessioners’ actions in no way negates the obvious fact
that the government has “procur[ed] services” — among oth-
ers, the discharge of its statutory duty to accommodate the
public (see 16 U.S.C. §§ 1, 5952) and the upkeep of its facili-
ties within the parks. Thus, as the district court itself ac-
knowledged, “the government is receiving services; it 1s

10

contracting for the provision of amenities to the visitors of its
national parks” (App., infra, 68a).

2. The NPS is also typically “procur{ing] construction,
alteration, repair, or maintenance of real property” by con-
tracting with concessioners. By statute, all the real property
that concessioner= construct or use in the national parks be-
longs to the geversment, not to the concessioner. See App,
infra, 20a; 16 U.S.C. § 5954(d). Concessioners are nonethe-
less responsible for constructing, maintaining and repairing
that property. For example, under section 9(a) of the Stan-
dard Concession Contract, 65 Fed. Reg. at 26,068, conces-
sioners “construct or install upon lands assigned to the
Concessioner * * * those real property improvements that are
determined by the [NPS] to be necessary and appropriate for
the conduct by the Concessioner of the visitor services re-
quired and/or authorized under [the contract].” Such real
property “will immediately become the property of the
United States.” /bid. Similarly, section 9(d) of the Standard
Concession Contract requires concessioners to “undertake
and complete” a “Concession Facilities Improvement Pro-
gram,” the specifics to be detailed in each contract. Jbid.
Section 6(g) makes concessioners responsible for weed and
pest mauagement at concession facilities. Jd at 26,067. Fi-
nally, as discussed above, section 10(a) provides that conces-
sioners “shall be solely responsible for maintenance, repairs,
housekeeping, and groundskeeping for all Concession Facili-
ties to the satisfaction of the Director.” Jd. at 26,068-26,069.
It is thus beyond question that the government is procuring
construction, repair, and maintenance services — as the dis-
trict court again recognized (App., infra, 69a).

3. The D.C. Circuit nonetheless held that concessions
contracts are not subject to the CDA because “[t]heir func-
tion is * * * to procure services or goods for” “park area visi-
tors” rather than “for the government.” App., infra, 27a. This
statement is both incorrect and irrelevant.

11

The court of appeals’ statement is incorrect because, as
noted above, concessions contracts provide a “service” to the
government by helping the NPS discharge its statutory obli-
gation to accommodate visitors in their enjoyment of the na-
tional parks. In addition, whoever might be said to “benefit”
from the provision of goods and services in the national
parks, it is beyond question that the government itself is the
principal beneficiary of the concessioners’ contractual
obligation to maintain and repair park facilities owned by the
government. A contract to maintain and repair the E] Tovar
Hotel at Grand Canyon National Park is no different in this
respect than a contract to maintain and repair the John F.
Kennedy Center for the Performing Arts (see Grunley
Constr. Co., ENGBCA No. 6327, 99-1 BCA 4 30,138, 1998
WL 835156 (Nov. 20, 1998)) or the Smithsonian Museums
(see Niko Contracting Co. v. United States, 39 Fed. Cl. 795
(1997), aff'd, 173 F.3d 437 (Fed. Cir. 1998) (table); Libra
Eng'g Inc., NASABCA Nos. 1182-17 et al., 1984 WL 13526
(July 13, 1984)).

Moreover, the court of appeals’ statement is irrelevant
because nothing in the CDA suggests that that statute applies
only to agency contracts that procure goods, services or
maintenance of real estate “for the government.” App., infra,
27a. To the contrary, the CDA unambiguously covers ail
procurement contracts entered into by government agencies,
even those that may be said to benefit third parties. As the
Court of Claims has observed, “{i]t is hoped that every Gov-
ernment purchase ‘benefits the public’ in some way.” Yosem-
ite Park & Curry Co. v. United States, 582 F.2d 552, 559 n.8
(Ct. CL. 1978) (emphasis in original). Indeed, given the pur-
poses of the CDA — to standardize government contracting
and to bring fairness to the government contracting process —
it is hard to see why it would matter whether the goods, ser-
vices, or property repair contracted for by the government
principally benefit “park area visitors” rather than the gov-
ernment itself. The court of appeals was not at liberty to add

12

limiting language to a statute that Congress intended to be
broad and comprehensive. See J.E.M. AG Supply, Inc. v.
Pioneer Hi-Bred Int'l, Inc., 122 S. Ct. 593, 598 (2001);
United States v. Rodgers, 466 U.S. 475, 480 (1984); Cana-
— Lid. v. United States, 324 U.S. 215, 222

4. As the court of appeals acknowledged (App., infra,
28a-29a), the Department of the Interior’s own Board of
Contract Appeals has long held that NPS concessions con-
tracts are subject to the CDA and has specifically found that
the portion of 36 C.F.R. § 51.3 exempting such contracts
from the CDA is invalid. See Watch Hill Concessions Inc.,
IBCA No. 4284-2000, 01-1 BCA 431,298, 2001 WL
170911, at *6 (Feb. 16, 2001); Nat'l Park Concessions, Inc.,
IBCA No. 2995, 94-3 BCA 427,104, 1994 WL 462401
(Aug. 18, 1994); R & R Enters., IBCA No. 2417, 89-2 BCA
§ 21,708, 1989 WL 27790, at *32 (Mar. 24, 1989), aff'd on
reconsideration, 89-3 BCA 4 22,043, 1989 WL 75890 (July
6, 1989). As the Board stated in Watch Hill,

Congress could not have expressed itself more
clearly to the effect that a// contract claims based on

a valid contractual theory fall within the procuring

* Nor was the court of appeals correct that coverage under the
CDA requires the government to “commit[] to pay out government
funds.” App., infra, 28a (internal citation and quotation marks
omutted). CDA coverage explicitly does not depend on the expen-
diture of appropriated funds. See 41 U.S.C. § 602(a). Thus, the
CDA is different from most other procurement-related statutes,
which are limited to appropriated-fund activities and therefore do
not apply to NPS concessions contracts. (For example, the Davis-
Bacon Act (40 U.S.C. § 276a et seq.) applies only to certain “con-
tract[s] in excess of $2,000” (id. § 276a(a)), and the Service Con-
tract Act (41 U.S.C. § 351 et seg.) applies to contracts “in excess
of $2,500” (id. § 351(a)); neither statute applies to NPS conces-
sions contracts.)

13

agencies’ jurisdiction under the Contract Disputes
Act. This was essential to Congress’ design that all
contract disputes be resolved according to the same
set of procedures, beginning with the decision of the
contracting officer.

2001 WL 170911, at *6 (emphasis added).

Rather than follow these decisions by the expert IBCA
(see 41 U.S.C. §§ 607(d), 609(a)(1)), the court of appeals re-
lied on YRT Services Corp. v. United States, 28 Fed. Cl. 366
(1993). See App., infra, 28a. But YRT held only that another
set of rules, the Federal Acquisition Regulations (“FAR”), do
not apply to concessions contracts. In addressing the question
of whether the FAR applied to concessions contracts, YRT
analogized to the applicability of yet another federal contract-
ing statute — the Competition in Contracting Act (“CICA”),
Pub. L. 98-369, 98 Stat. 1175 (codified at 31 U.S.C. §§ 3551-
3556, 41 U.S.C. § 253) — which the YRT court opined did not
apply to concessions contracts. See YRT, 28 Fed. Cl. at 392.
In making this CICA-applicability analogy, however, the
YRT decision offered no opinion about the applicability of
the CDA.

Even if YRT were relevant to this case, that decision was
expressly based on the views of the Comptroller General,
who administers the CICA. See 28 Fed. Cl. at 392 (citing
Stephen Sloan Marine Corp., B-234219, 89-1 C.P.D. 4 435
(May 9, 1989)). But the Comptroller General since has clari-
fied that YRT was based on a misunderstanding of his CICA
jurisdiction. Thus, in adopting YRT’s “permits” analogy, the
D.C. Circuit ignored the Comptroller General’s repeatedly-
“permits,” but instead involve services for the agency and
hence are subject to CICA.’

> See Total Procurement Services, Inc., B-255934.3, 1994 WL
450445 (Aug. 16, 1994) (“Where a license agreement or conces-

14

Underscoring the D.C. Circuit’s error, the Comptroller
General just last month explained the distinction between
NPS ‘permits” and NPS “contracts,” holding that NPS con-
cessions contracts are “procurements” within its CICA juris-
diction:
[Where the award of a concession contract included
the provision of numerous services to the govern-
ment, which the agency might otherwise have had to
purchase or perform itself, we found that the solici-
tation involved a procurement of services. * * * On
the other hand, * * * where the agency’s issuance of
concession permits merely allowed entry by visitors
into @ national park, and did not also include the
provision of services to the government, we did not
exercise jurisdiction.

Starfleet Marine Transp., Inc., B-2901 81, 2002

Gen. LEXIS 90, at *14-15 (July 5, 2002). ee

Indeed, the decision in Starfleet Marine considered and
,
rejected the D.C. Circuit’s reasoning in this very case:

In reaching its conclusion and holding, the [D.C.
Circuit] seems to have assumed that all concession
contracts result in no more than “incidental bene-
fits” to the government. In its brief discussion of this

sion contract confers a benefit upon the government and furthers
the function of an agency, we view the agreement or contract as
one involving the procurement of property or services and there-
fore subject to our bid protest jurisdiction.”); West Coast Copy
Inc.; B-254044.2, 1993 WL 476970, at *4 (Nov. 16, 1993)
(“Where the government invites private vendors to compete for a
business opportunity, the performance of which will produce a
benefit to the government (such as a reduction in the government
agency's own workload or some other support of the agency's mis-
sion), — necessary to invoke our [CICA] jurisdiction are

15

issue, the court also appears to have assumed that
the primary purpose of a contractual transaction
makes it exclusively a sale or a procurement. In our
opinion, the court’s view that a concession contract
cannot also involve the procurement of property or
services within the meaning of CICA does not take
into account the specific facts of each situation.

Id. at *16-17."

5. Finally, we note that when it was to the government’s
advantage to do so, the Department of Justice itself argued
that the CDA applies to concessions contracts. See Pound v.
United States, No. 94-496C (Fed. Cl. Aug. 30, 1996); App.
infra, 95a-100a. The concessions contract at issue in Pound
was to operate a marina on land owned by the Army Corps of
Engineers. See id. at 98a. The government argued that the
CDA applied to that concessions contract under, among other
subsections, 41 U.S.C. § 602(a)(3), which covers government
contracts for the repair or maintenance of real property. See
Defendant’s Motion To Dismiss Or, In The Alternative, For
Summary Judgment Upon Count I Of The Complaint And
Motion For Summary Judgment Upon Counts II And III And
Defendant’s Counterclaim, at 10-11 (Apr. 28, 1995), re-

‘ Although the Comptroller General’s reasoning is persuasive
evidence that the CDA applies to NPS concessions contracts, we
agree with the NPS that the CICA in fact does not apply to such
contracts. The CICA applies to “contract(s] for the procurement of

or services” (31 U.S.C. § 3551(1)(A)), which, as the
Comptroller General notes, are also contracts within the scope of
the CDA. See Starfleet Marine, 2002 U.S. Comp. Gen. LEXIS, at
*16 n.10. Like the CDA, the jurisdiction of the CICA “does not
turn on whether appropriated funds are involved.” Jd. at *12. But
the CICA, unlike the CDA, on its face “does not encompass pro-
curement procedures which are otherwise expressly authorized by
other statutes” (YRT, 28 Fed. Cl. at 392-393 (citing 41 U.S.C.
§ 253(a)(1))), such as the 1998 Act.

16

printed at App., infra, 100a. The government contended that
the CDA was applicable because the concessioner con-
structed structures on and maintained the marina, in much the
same way that NPS concessioners construct structures on and
maintain NPS concessions.”

In sum, both the D.C. Circuit’s decision limiting cover-
age of the CDA to contracts that “procure services or goods
for the government” (App., infra, 27a (emphasis added)) and
its determination that NPS concessions contracts fail to meet
that test are contrary to the plain language and purpose of the
statute and are inconsistent with the views of expert agencies.
The NPS plainly procures both “services” and the “construc-
tion, alteration, repair or maintenance of real property” (41
U.S.C. § 602(a)(2)-(3)) in its concessions contracts.

B. The Decision Below Creates A Conflict In The
Circuits On Whether The Contract Disputes Act
Applies To Concessions Contracts.

The court of appeals’ construction of the Contract Dis-
putes Act cannot be squared with the decision of the Federal
Circuit in Total Medical Management, Inc. v. United States,
104 F.3d 1314, 1320 (Fed. Cir. 1997), and of the Federal
Circuit’s precursor — the Court of Claims — in Yosemite Park
& Curry Co., 582 F.2d 552.

Total Medical Management involved agreements be-
tween the military and a private health care company to pro-
vide medical services to military dependants at an army
hospital. As here, the government argued that the agreements
were not subject to the CDA “because they are not procure-
ment contracts for the benefit of the government,” but instead
“are solely for the benefit of the military dependents who re-

5

The Court of Federal Claims in Pound did not address substan-
tively the applicability of the CDA, noting instead that the parties
agreed that the Act applied. See Pound v. United States, No. 94-
496C, slip op. at 1 n.1, 10 n.2 (Fed. Cl. Aug. 30, 1996).

17

ceive the medical care.” See Total Med. Mgmt., 104 F.3d at
1320. The Federal Circuit rejected that argument, explaining
that, “since it is clear that the government has legal obliga-
tions to military dependents and benefits by obtaining said
dependents’ care at a reduced cost,” the agreements were
procurement contracts subject to the CDA. Jbid.

In precisely the same way, the NPS has statutorily de-
fined legal obligations to provide the visiting public with
food, lodging, and other services in the national parks, and it
has elected to discharge those duties by procuring them from
concessioners rather than by furnishing them directly. See 16
U.S.C. §§ 1, 5951, 5952. See generally pages 4-6, supra.
The decision below — that the CDA does not apply to NPS
concessions contracts because their function is to “authorize
third parties to provide services” rather than “to procure ser-
vices or goods for the government” (App., infra, 27a) - is
totally at odds with the Federal Circuit’s view of the CDA in
Total Medical Management.

Indeed, the NPS itself convinced the Court of Claims that
concessions contracts fall within the reach of certain gov-
ernment procurement statutes such as the CDA. In Yosemite
Park & Curry Co., the concessioner argued that NPS conces-
sions contracts were exempt from such statutes. The NPS
disputed that assertion, and the court agreed with the agency.
As the court explained, NPS concessions contracts will be
covered by procurement statutes — assuming other statutory
requirements are met — because the NPS cannot “avoid nor-
mal, legally mandated, procurement procedures” by “charac-
teriz[ing] the procurement of * * * services for the public as
the granting of a ‘concession’ to a specific contractor.” Yo-
semite Park & Curry Co., 582 F.2d at 558. As the court ex-
plained,

[P]laintiff’s attempted argument that a “concession”
purchase is somehow different from a normal pur-
chase because a concession contract “benefits the

18

public” should * * * be accorded little weight. It is

hoped that every Government purchase “benefits the
public” in some way.

Id. at 559 n.8 (emphasis in original).°

Despite the fact that the NPHA expressly relied on Total
Medical Management, Yosemite Park & Curry Co., and Oro-
ville-Tonasket in its briefs (see Br. Pls.-Appellants at 52, 54;
Reply Br. Pls.-Appellants at 28), the court below never men-
tioned, much less attempted to reconcile, these conflicting
decisions. Certiorari is plainly warranted to resolve this sig-
nificant split of authority.

C. The Issue Presented Here Is Of Substantial
Practical Importance.

. This Court’s review is essential because of the practical
importance of the issue presented. The government contracts
to purchase more than $220 billion in goods and services
each year. See Encourage Contracting Out of Federal Ser-
vices: A Legislative Hearing on H.R. 3832, The Services Ac-
quisition Reform Act of 2002 (SARA), Before the Subcomm.
on Technology and Procurement Policy, House Comm. on
Gov't Reform, 107th Cong. (Mar. 7, 2002) (statement of An-
gela B. Styles, Administrator for Federal Procurement Pol-
icy, at 1). This case has implications not only for NPS

* The Court of Federal Claims - the court to which Congress has
conferred jurisdiction over CDA claims (see page 4, supra) — has
also held that the CDA applies to concessions contracts indistin-
guishable from NPS concession contracts. See, e.g., Oroville-
Tonasket, 33 Fed. Cl. at 22 (concluding that contract to manage a
dam providing irrigation involved both “procurement of services”
and procurement of “construction, alteration, repair or maintenance
of real property” for purposes of CDA because contractor operated
and maintained federally-owned facility, thus fulfilling responsi-
bilities assigned by Congress to Secretary of Interior).

19

concessions contracts, but also for a significant portion of all
government procurement contracts.

As Congress explained in enacting the CDA,

How procurement functions has a far-reaching im-
pact on the economy of our society and on the suc-
cess of many major Government programs. Both
can be affected by the existence of competition and
quality contractors — or by the lack thereof. The way
po‘ential contractors view the disputes-resolving
system influences how, whether, and at what prices
they compete for Government contract business.

S. REP. No. 95-1118, at 4. “Prior to the CDA, the ‘system’
for resolving federal contract disputes can best be described
as a mess.” C. Kipps, T. Kindness, & C. Hamrick, The Con-
tract Disputes Act: Solid Foundations, Magnificent System
(“Solid Foundations”), 28 PuB. CONT. L.J. 585, 585 (1999).
Thus, the CDA was passed with the express purposes of
standardizing government contracting systems and providing
contractors with an independent method to adjudicate dis-
putes, thus freeing them from “[t]he predilections of different
agencies.” S. REP. No. 95-1118, at 3.

The CDA has been a great success, hailed as “a remark-
able milestone in the field of government contracts for sev-
eral reasons, including the fact that it lifted the disputes
process out of the discretionary realm of agency clauses and
placed the process squarely within a fixed statutory frame-
work.” Solid Foundations, supra, at 591. The CDA has
“worked exceedingly well” for the past two decades. Id. at
585. In the sole previous instance when the courts signifi-
cantly limited the scope of the CDA — by proclaiming restric-
tive rules for “certifying” a claim — Congress eventually
stepped in to overrule that cramped interpretation. See id. at
592-595. Rather than rely on Congress, in this instance the
Court should grant certiorari to resolve the confusion in the
circuits over the coverage of the CDA and to correct the

20

lower court’s unduly narrow reading of the statute. Cf.
United States v. Utah Constr. & Mining Co., 384 U.S. 394,
400 (1966) (Court granted certiorari “because of the impor-
tance of [questions about the coverage of government con-
tract disputes clause] in the administration of government
contracts”).

The decision below — exempting government contracts
that benefit third parties from the scope of the CDA — un-
. dermines the CDA’s goals of consistency and external ac-
countability and threatens a return to the messy system of
yesteryear, when “contractors were caught in an irrational
patchwork system that limited their access to court, failed to
provide adequate due process protections, and often resulted
in substantial delays.” Solid Foundations, supra, at 587. As
Total Medical Management, Oroville-Tonasket, and Pound
demonstrate, the NPS is far from unique in relying on con-
cessions contracts to fulfill significant portions of its statu-
tory mission.’ The decision below could affect all such
concessions contracts. Even uncertainty about whether con-
cessions contracts include the protections of the CDA is,
from the perspective of a contractor, almost as bad as not
having such protections at all. Yet the D.C. Circuit’s amor-
phous “benefits-third-parties” exception makes it difficult or
impossible for agencies and contractors alike to determine
whether a specific contract is covered by the CDA, or if in-
. Stead its benefits inure to third parties to such an extent that
the CDA does not apply.

The decision below also creates an incentive for agencies
that would rather not expose their contracting decisions to a

” See also, e.g., Harry Pohl KG, ASBCA No. 51523, 01-1 BCA
4 31,329, 2001 ASBCA LEXIS 40 (Feb. 28, 2001); Home Entm’t,
Inc., ASBCA No. 50791, 99-2 BCA 430,550, 1999 ASBCA
LEXIS 126 (Aug. 23, 1999); Senor Tenedor, S.A. de C.V., ASBCA
Nos. 48502 et al., 97-2 BCA 4 29,192, 1997 ASBCA LEXIS 150
(Aug. 15, 1997).

21

neutral arbiter to design their contracting programs in such a
way that the CDA would not apply. Because it could be ar-
gued that any government service contract benefits the per-
sons served—even if fulfilling a statutory mandate — the
unifying protections and procedures afforded to a large per-
centage of government contracts could unravel quickly.

Finally, the decision below has significant implications
for the mm rortin of the Nation’s national parks. Under the
regulation at issue, NPS concessioners are denied neutral hl
biters in any dispute they may have with the NPS, which “in-
fluences how, whether, anc at what prices they compete for
Government contract business.” S. REP. No. 95-1118, at 4.
The lack of protection afforded by the CDA will damage the
public-private partnership that long has served visitors to the
national parks and fulfilled the statutory mandate of 16
U.S.C. § 1 (see pages 4-5, supra), in ways that may signifi-
cantly undermine the public’s ability to enjoy these national
treasures.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

KENNETH S. GELLER
Counsel of Record

RICHARD B. KATSKEE

DAVID M. GOSSETT
Mayer, Brown, Rowe & Maw
1909 K Street, NW
Washington, DC 20006
(202) 263-3000

AUGUST 2002

APPENDIX

la

APPENDIX A

United States Court of Appeals,
District of Columbia Circuit.

AMFAC RESORTS, L.L.C., Appellant,
Vv.

UNITED STATES DEPARTMENT OF THE
INTERIOR, ET AL., Appellees.

Nos. 01-5223, 01-5226, 01-5229 and 01-5233.

Argued Nov. 6, 2001.
Decided March 1, 2002.

Rehearing and Rehearing En Banc Denied May 8, 2002.

_ Before: RANDOLPH and GARLAND, Circuit Judges,
and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge
RANDOLPH.

RANDOLPH, Circuit Judge:

These are four consolidated cases on appeal from the
judgment of the district court sustaining regulations of the
National Park Service governing concession contracts in the
National Park System. Many of the issues are tied to the his-
tory of the National Park System and the functions conces-
sioners perform in the operation of the parks.

The history begins with the discovery of “Old Faithful”
and the other natural wonders of what is now Yellowstone
National Park. In 1872, Congress withdrew the land at the
headwaters of the Yellowstone River from “settlement, occu-
pancy, or sale,” thus creating the first national park in the
United States. Act of Mar. 1, 1872, ch. 24, § 1, 17 Stat. 32.
See also AUBREY L. HAINES, YELLOWSTONE NATIONAL
PARK: ITS EXPLORATION AND ESTABLISHMENT (1974). Not
everyone had been enthusiastic about the plan to create Yel-

2a

lowstone National Park. A local newspaper editorial worried
that “the effect of this measure will be to keep the country a
wilderness, and shut out, for many years, the travel that
would seek that curious region if good roads were opened
through it and hotels built therein.” HAINES, supra, at 127
(quoting the HELENA DAILY HERALD of Mar. 1, 1872). In the
final legislation, Congress responded by authorizing the Sec-
retary of the Interior to lease portions of the park for “the
erection of buildings for the accommodation of visitors.” 17
Stat. 33.

As the United States withdrew more areas from the pub-
lic domain, it continued to favor the interests of park visitors.
In creating the National Park Service in 1916, Congress au-
thorized the Interior Secretary to “grant privileges, leases,
and permits for the use of land for the accommodation of
visitors” to each of the “various parks, monuments, or other
reservations” under the Secretary’s authority. An Act to Es-
tablish a National Park Service, ch. 408, 39 Stat. 595 (1916).
In the view of the first director of the Park Service, Stephen
Mather: “Scenery is a hollow enjoyment to a tourist who sets
out in the morning after an indigestible breakfast and a fitful
sleep in an impossible bed.” Dennis J. Herman, Loving Them
to Death: Legal Controls on the Type and Scale of Devel-
opment in the National Parks, 11 STAN. ENVTL. L. J. 3, 3
(1992).

During its first thirty years, the Park Service followed in-
ternal regulations and policies governing concessioners and
their obligations to park visitors and to the national park
lands. The government also offered financial inducements to
private contractors to convince them to provide and operate
facilities in what were often remote locations. See Park
Concession Policy: Hearings Before the Subcomm. on Na-
tional Parks of the House Comm. on Interior and Insular Af-
fairs, 88th Cong. 5-8 (1964) [hereinafter Park Concession
Policy Hearings] (letter from John A. Carver, Jr., Assistant
Secretary of the Interior).

3a

For our purposes the most significant of these incentives
was a preferential right of renewal, which “contemplated that
every existing contract covering public operations [in the na-
tional parks] will be renewed at the expiration thereof, pro-
vided, of course, that full and satisfactory service to the
public had been given thereunder.” Memorandum for the
Acting Under Secretary, U.S. Department of the Intenor
(Aug. 10, 1940). When the Interior Department sought to
change its policies and withdraw some of these financial in-
centives in the late 1940s, the concessioners and some in
Congress balked. See H.R. RES. 66, 8lst Cong. (1950),

by the Comm. on Public Lands and included in H.R.
REP. No. 81-3133, at 5-6 (1950). In response, the Secretary
announced new guidelines for concession contracts and pre-
served many of the existing financial incentives for conces-
sioners, including the preferential right of renewal. Jd. at 4-5.
The House Committee on Public Lands passed a resolution
endorsing these new guidelines, although the resolution of
course had no legal effect. JNS v. Chadha, 462 U.S. 919
(1983).

By the 1960s, other House committees started expressing
doubt about the soundness of the Interior Department’s con-
tracting policies, particularly the financial incentives it was
giving concessioners. See HOUSE COMM. ON GOVERNMENT
OPERATIONS, SURVEY OF SELECTED ACTIVITIES, H.R. REP.
No. 88-306, pt. 3, at 4-12 (1963) (“The committee’s inquiry
disclosed considerable weakness in the National Park Ser-
vice’s operations in several matters involving concessioners
in the national parks.”). When Congress considered the 1964
appropriations bill for the Department of the Interior, the
House Committee on Appropriations recommended that
“competitive bidding should be required for concession con-
tracts, in lieu of the current practice of granting preferential

ities to existing concessioners to negotiate new con-
tracts.” DEPARTMENT OF THE INTERIOR AND RELATED

4a

AGENCIES APPROPRIATION BILL, H.R. REP. No. 88-177, at 10
(1963). ;

Concerned that “certain other committees that do not
have junsdiction” had “attempted to get into the problem of
concessions,” the House Committee on Interior and Insular
Affairs produced a bill to “put into statutory form” the long-
standing concessions policies of the Park Service, including
the preferential right of renewal. H.R. REP. NO. 89-591, at 1
(1965); Park Concession Policy Hearings at 19. In 1965,
these concession policies were enacted into law. See 111
CONG. REC. 23,632-48 (1965). Part of the legislation pro-
vided that the “Secretary [of the Interior] shall ... giv[e] pref-
erence in the reewal of contracts or permits and in the
negotiation of new contracts or permits to the concessioners
who have performed their obligations ... to the satisfaction of
the Secretary.” National Park Service Concessions Policy
Act, Pub. L. No. 89-249, § 5, 79 Stat. 969, 970 (1965), re-
pealed by National Parks Omnibus Management Act of 1998,
Pub. L. No. 105-391, § 415(a), 112 Stat. 3497, 3515. The
preference gave “incumbent concessioners, upon renewal, the
right to meet any better offer received” by the Park Service.
U.S. DeEP’T OF THE INTERIOR, REPORT OF THE TASK FORCE
ON NATIONAL PARK SERVICE CONCESSIONS 10 (1990).

. The 1965 Act governed all concession contracts entered
into by the Park Service. Concessioners paid the government
a franchise fee, typically less than five percent of gross reve-
nues, for the privilege of operating on federal land. If they
used government-owned facilities they paid an additional fee.

In 1998, after several aborted attempts, Congress re-
pealed the preferential right of renewal and enacted other
rules governing concession contracts. National Parks Omni-
bus Management Act of 1998, 16 U.S.C. §§ 5951-5966.

Plaintiffs are three companies who have current conces-

sions contracts with the Park Service and an association of
concessioners. They brought four separate actions challeng-

Sa

ing the Park Service regulations, issued in 2000, to imple-
ment the 1998 Act. 65 Fed. Reg. 20,630 (Apr. 17, 2000) (to
be codified at 36 C.F.R. pt. 51). The district court consoli-
dated the four lawsuits, and granted summary judgment to
the government on all of the claims save one (which has not
been appealed to this court). Amfac Resorts v. United States
Dep't of the Interior, 142 F. Supp. 2d 54 (2001).

The first issue centers on the 1998 Act’s repeal of the
statutory preferential right of renewal in § 5 of the 1965 Act.
The 1998 Act provided that, except for small contracts and
outfitter and guide services, “the Secretary shall not grant a
concessioner a preferential right to renew a concessions con-
tract.” 16 U.S.C. § 5952(7). A savings clause in the 1998
Act, § 415(a), states: “repeal of [the 1965 Act] shall not af-
fect the validity of any concessions contract or permit entered ©
into under such Act, but the provisions of this title shall ap-
ply to any such contract or permit except to the extent such
provisions are inconsistent with the terms and conditions of
any such contract or permit.” Pub. L. No. 105-391, § 415(a),
112 Stat. 3497, 3515 (1998).

The Park Service interpreted the repealing and the sav-
ings clauses in the following narrative regulation:

§ 51.102 What is the effect of the 1998 Act’s re-
peal of the 1965 Act’s preference in renewal?

(a) Section 5 of the 1965 Act required the Secretary
to give existing satisfactory concessioners a prefer-
ence in the renewal (termed a “renewal preference”
in the rest of this section) of its concession contract
or permit. Section 415 of the 1998 Act repealed this
statutory renewal preference as of November 13,
1998. It is the final decision of the Director, subject
to the right of appeal set forth in paragraph (b) of
this section, that holders of 1965 Act concession

6a

contracts are not entitled to be given a renewal pref-
erence with respect to such contracts (although they
may otherwise qualify for a nght of preference re-
garding such contracts under Sections 403(7) and
(8) of the 1998 Act as implemented in this part).
However, if a concessioner holds an existing 1965
Act concession contract and the contract makes ex-
press reference to a renewal preference, the conces-
sioner may appeal to the Director for recognition of
a renewal preference.

(b) Such appeal must be in writing and be received
by the Director no later than thirty days after the is-
suance of a prospectus for a concession contract un-
der this part for which the concessioner asserts a
renewal preference. The Director must make a deci-
sion on the appeal prior to the proposal submission
date specified in the prospectus. Where applicable,
the Director will give notice of this appeal to all po-
tential offerors that requested a prospectus. The Di-
rector may delegate consideration of such appeals
only toa Deputy or Associate Director. The decid-
ing official must prepare a written decision on the
appeal, taking into account the content of the appeal
and other available information.

(c) If the appeal results in a determination by the Di-
rector that the 1965 Act concession contract in ques-
tion makes express reference to a _ renewal
preference under section 5 of the 1965 Act, the 1998
Act’s repeal of section 5 of the 1965 Act was incon-
sistent with the terms and conditions of the conces-
sion contract, and that the holder of the concession
contract in these circumstances is entitled to a re-
newal preference by operation of law, the Director
will permit the concessioner to exercise a renewal
preference for the contract subject to and in accor-
dance with the otherwise applicable night of prefer-

7a

ence terms and conditions of this part, including,
without limitation, the requirement for submission
of a responsive proposal pursuant to the terms of an
applicable prospectus. The Director, similarly, will
permit any holder of a 1965 Act concession contract
that a court of competent jurisdiction determines in
a final order is entitled to a renewal preference, for
any reason, to exercise a right of preference in ac-
cordance with the otherwise applicable requirements
of this part, including, without limitation, the re-
quirement for submission of a responsive proposal
pursuant to the terms of an applicable prospectus.

36 C.F.R. § 51.102 (2001).

The Park Service thus will not recognize a preferential
right of renewal for concessioners whose pre-1998 contracts
are expiring, unless the contract expressly so provides. See
65 Fed. Reg. at 20,631-33. In the language of the savings
clause of § 415(a), without such contractual “terms and con-
ditions” it would not be “inconsistent” — as the Park Service
sees it — to refuse to allow a preferential right of renewal.

A typical concession contract runs for 15 or 20 years.
REPORT OF THE TASK FORCE ON NATIONAL PARK SERVICE
CONCESSIONS, supra, at 5. One of the plaintiffs, Amfac Re-
sorts, L.L.C., had a 30-year contract for the Grand Canyon.
A right of renewal for pre-1998 contracts is therefore a mat-
ter of great interest to those holding these contracts. The
concessioners say that the renewal provision of the 1965 Act
represented an “entrenched policy”; that the policy was in-
corporated by law as an unwritten term in every concession
contract signed between 1965 and 1998; and that the Park
Service regulation violates § 415 of the 1998 Act (the savings
clause) because it allows a preferential right of renewal only
if contracts before the 1998 Act expressly so state.

8a

A.

The concessioners’ argument in favor of an “implied”
right of renewal initially rests on the “Christian doctrine,”
named after G.L. Christian & Assocs., 312 F.2d 418, 424 (Ct.
Cl. 1963). As they explain it, the doctrine requires “that
longstanding and deeply-ingrained agency policies, such as
the [Park Service’s] entrenched policy of granting conces-
sioners renewal rights in exchange for concessioner invest-
ments, form a mandatory part of all government contracts.”
Brief for Appellants at 21.

The Federal Circuit has, on occasion, concluded that cer-
tain statutory or regulatory provisions may become part of a
government contract even though the contract does not con-
tain language to that effect. See S.J. Amoroso Constr. Co. v.
United States, 12 F.3d 1072, 1075 (Fed. Cir. 1993); General
Engineering & Machine Works v. O'Keefe, 991 F.2d 775,
779 (Fed. Cir. 1993).

Our court has never adopted the Federal Circuit’s Chris-
tian doctrine. Even if we did so, it would boot the conre¢s-
sioners nothing. In describing the doctrine, they have
omitted a crucial element. The Federal Circuit does not hold
that significant or important federal policies “form part of
government contracts even where absent from those con-
tracts’ explicit text.” Brief for Appellants at 22. If that were
the law, Congressional power to make adjustments in legisla-
tion would be greatly constricted. Statutory provisions would
live on as part of long-term contracts well after their repeal or
modification. This is why, as the Supreme Court put it in
Dodge v. Board of Education, 302 U.S. 74, 79 (1937), there
is a “presumption” that “a law is not intended to create pri-
vate contractual or vested rights but merely declares a policy
to be pursued until the legislature shall ordain otherwise.”
To this the Court added in Nat'l R.R. Passenger Corp. v. At-
chison, Topeka & Santa Fe Ry., 470 U.S. 451, 465-66 (1985)
[hereinafter Atchison]: “Policies, unlike contracts, are inher-

9a

ently subject to revision and repeal, and to construe laws as
contracts when the obligation is not clearly and unequivo-
cally expressed would be to limit drastically the essential
powers of a legislative body.” It is true, as the concessioners
point out, that the holding of Atchison was that a statute did
not itself create a contract. Reply Brief for Appellants at 12.
But it is not true that the case is therefore “irrelevant.” Jd.
The Court’s reasoning applies equally to claims, such as the
concessioners’, that a statute (here the 1965 Act) created a
contractual obligation in all contracts executed before its re-
peal. See General Motors Corp. v. Romein, 503 U.S. 181,
190 (1992).

One element of the Christian doctrine, the element miss-
ing from the concessioners’ statement of the law, saves it
from contradicting this line of Supreme Court authority. Ac-
cording to the Federal Circui’, it is not enough that the legis-
lative or regulatory provision is important or significant
(assuming one could make such rankings). To constitute a
contractual obligation even though not written in the con-
tract, the provision must be a mandatory contract clause, a
clause the legislation — or as in Christian, 312 F.2d at 424,
the regulation — requires to be included in contracts. Thus,
“a mandatory contract clause that expresses a significant or
deeply ingrained strand of public procurement policy is con-
sidered to be included in a contract by operation of law.” S.J.
Amoroso Constr. Co. v. United States, 12 F.3d at 1075. And
the Christian doctrine “applies to mandatory contract clauses
which express a significant or deeply ingrained strand of
public procurement policy.” General Engineering & Ma-
chine Works v. O'Keefe, 991 F.2d at 779.

The renewal provision contained in § 5 of the 1965 Act
was by no stretch a mandatory contract term. The Secre-
tary’s contracting authority was derived from a different part
of the 1965 Act — § 3, which authorized the Secretary to
“include in contracts” such “terms and conditions as, in h's
judgment, are required to assure the concessioner of adequate

10a

protection against loss of investment ... resulting from discre-
tionary acts, policies, or decisions of the Secretary occurring
after the contract has become effective....” § 3, 79 Stat. 969.
Section 5 of the 1965 Act was of another sort. It stated that
the Secretary “shall ... giv[e] preference in the renewal of
contracts or permits....” § 5, 79 Stat. 970. Rather than leav-
ing the matter to individual negotiations, §5 required the
Secretary to grant a right of renewal to all concessioners, re-
gardless of the terms of their individual concession contracts.
The provision thus constituted “legislation which merely de-
clares a state policy, and directs a subordinate body to carry it
into effect.” Dodge v. Bd. of Educ., 302 U.S. at 78. We
agree with the district court that if § 5 meant that the Secre-
tary had to insert a preferential right of renewal clause in all
concession contracts, one would have expected a direction, or
at least an authorization, to this effect. 142 F. Supp. 2d at 72.
There is none.

It is possible that some parties nevertheless insisted on
having a right of renewal written into their contracts and that
the Secretary yielded. Possible, but not likely. The conces-
sioners have identified no such contract and the Park Service
is aware of none. 65 Fed. Reg. at 20,664. The Service’s
standard-form concession contract, in effect from 1965 to
1998, contained no right-of-renewal clause. See 65 Fed. Reg.
at 20,632. The regulation under the 1998 Act nevertheless
allows for the possibility and, in compliance with the saving
clause, states that if a concession contract contains an express
right of renewal the Secretary will honor it. 36 C.F.R.
§ 51.102(c) (2000).

Apart from the Christian doctrine, each of the conces-
sioners maintains that the Park Service’s regulation is “fa-
cially invalid because [it denies] altogether the possibility of
implied contractual rights in individual cases” and prevents
“any concessioner in a future proceeding from offering spe-

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cific evidence of a bargained-for and mutually-agreed upon
contractual renewal right. If even one concessioner has such
evidence, the regulations denying those rights across-the-
board are unlawful.” Brief for Appellants at 26, 27. In other
words, although the regulation is valid as applied to dozens
of concession contracts, it is invalid because of the possibil-
ity that one concessioner might have an implied — that is, an
unwritten — preferential right of renewal. The argument,
aimed at the validity of the regulation on its face, does not
accurately state the law.

In United States v. Salerno, 481 U.S. 739, 745 (1987),
the Supreme Court stated:

A facial challenge to a legislative Act is, of course,
the most difficult challenge to mount successfully,
since the challenger must establish that no set of cir-
cumstances exists under which the Act would be
valid. The fact that the [statute] might operate un-
constitutionally under some conceivable set of cir-
cumstances is insufficient to render it wholly
invalid, since we have not recognized an “over-
breadth” doctrine outside the limited context of the
First Amendment.

Justice Stevens believes that only the second sentence of
the Salerno excerpt states the governing principle for facial
challenges. He and Justice Scalia have debated whether the
first sentence from Salerno — what has become known as
the “no-set-of-circumstances” test — is instead controlling.
See City of Chicago v. Morales, 527 U.S. 41, 55 (1999) (plu-
rality opinion by Stevens, J., joined by Justices Souter and
Ginsburg); id. at 74-83 (Scalia, J., dissenting). See also
Anderson v. Edwards, 514 U.S. 143, 155 n.6 (1995); Santa
Fe Indep. Sch. Dist. v. Doe, 530 U.S. 290, 318 (2000)
(Rehnquist, C.J., joined by Justices Scalia and Thomas, dis-
senting). For our part, we have invoked Salerno’s no-set-of-
circumstances test to reject facial constitutional challenges.

12a

See, e.g., James Madison Ltd., by Hecht v. Ludwig, 82 F.3d
1085, 1101 (D.C.Cir.1996); Chemical Waste Mgmt., Inc. v.
EPA, 56 F.3d 1434, 1437 (D.C.Cir.1995); Steffan v. Perry,
41 F.3d 677, 693 (D.C.Cir.1994) (en banc).

The facial attack on § 51.102 is not, of course, on the ba-
sis that the regulation is unconstitutional. The claim is that
§ 51.102 conflicts with § 415 of the 1998 Act. In National
Mining Ass'n v. Army Corps of Engineers, 145 F.3d 1399,
1407 (D.C.Cir.1998), we declined to adopt the Salerno test in
a comparable case, stating that the “Supreme Court has never
adopted a ‘no set of circumstances’ test to assess the validity
of a regulation challenged as facially incompatible with gov-
erning statutory law.”

Our examination of Supreme Court precedent in National
Mining apparently overlooked Reno v. Flores, 507 U.S. 292
(1993). There a class of alien juveniles, arrested on suspicion
of being deportable and then detained pending deportation
hearings, claimed that a regulation preventing their release
except to close relative’ violated the Due Process Clause and
conflicted with the underlying statute. The Court, speaking
through Justice Scalia, described the case as involving only a
facial challenge to the regulation and then held as follows:
“To prevail in such a facial challenge, respondents ‘must es-
tablish that no set of circumstances exists under which the
[regulation] would be valid.’ United States v. Salerno, 481
U.S. 739, 745 (1987). That is true as to both the constitu-
tional chalfienges, see Schall v. Martin, 467 U.S. 253, 268
(1984), and the statutory challenge, see [JNS v. National Cen-
ter for Immigrants’ Rights, 502 U.S. 183, 188 (1991) [here-
inafter NCIR]].” 507 U.S. at 301. See Public Lands Council
v. Babbitt, 167 F.3d 1287, 1301 (10th Cir.1999) (applying
the Reno v. Flores formulation to a statutory challenge to a
regulation). Cf Pharmaceutical Research & Mfrs. v. Con-
cannon, 249 F.3d 66, 77 (1st Cir.2001) (applying Salerno in
a preemption case). See also Marc E. Isserles, Overcoming

13a

Overbreadth: Facial Challenges and the Valid Rule Re-
quirement, 48 AM. U. L. REV. 359, 405 (1998).

When an intervening Supreme Court decision alters the
law of the circuit, a panel of our court must follow the
Court’s decision in all later cases. See, e.g., McKesson Corp.
v. Islamic Republic of Iran, 52 F.3d 346, 350 (D.C.Cir.1995);
National Treasury Employees Union v. FLRA, 30 F.3d 1510,
1516 (D.C.Cir.1994). But here the Supreme Court decision
was not intervening; it was rendered before National Mining.
Whether despite Reno v. Flores, National Mining therefore
must stand as circuit law unless and until the full court over-
rules it is a question unnecessary for us to answer. See
LaShawn A. v. Barry, 78 F.3d 1389, 1395 (D.C.Cir.1996) (en
banc). National Mining dealt only with the no-set-of-
circumstances formulation of Salerno. It did not mention
NCIR, the opinion cited in Reno v. Flores for the proposition
that Salerno applied to statutory challenges. Justice Stevens,
writing for the Court in NCIR, held: “That the regulation
may be invalid as applied in some cases, however, does not
mean that the regulation is facially invalid because it is with-
out statutory authority.” 502 U.S. at 188. NCIR, without cit-
ing Salerno, echoed in a non-constitutional setting the
sentence in Salerno following the no-set-of-circumstances
test — “The fact that the [statute] might operate unconstitu-
tionally under some conceivable set of circumstances is in-
sufficient to render it wholly invalid,” 481 U.S. at 745. See
Janklow v. Planned Parenthood, 517 U.S. 1174 (1996)
(memorandum of Stevens, J., on denial of certiorari).

Either formulation — the no-set-of-circumstances test
adopted from Salerno in Reno v. Flores, or the less strict
NCIR standard — may pose potential problems for judicial
review of agency regulations, especially in this circuit. Lack-
ing a rulemaking record containing evidence relating to the
rule’s application to a particular entity, petitioners ordinarily
mount only facial attacks, often on the ground that the
agency’s product conflicts with the statute. In such cases, the

l4a

consequence of upholding the regulation because it is not in-
valid in all its applications (Reno v. Flores), or because it is
invalid in only some of its applications (NCIR), may be that
petitioners would have to make their challenge in another
circuit and in another setting, in defense of an enforcement
action for instance. Some of the statutes governing jurisdic-
tion prescribe a specific time period for judicial review of
regulations, restrict venue to our circuit, and may prohibit
review outside the time period, except in limited circum-
stances. See, e.g., Clean Air Act, 42 U.S.C. § 7607(b); Com-
prehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA), 42 U.S.C. § 9613(a);
Adamo Wrecking Co. v. United States, 434 U.S. 275 (1978);
United States v. Ethyl Corp., 761 F.2d 1153 (Sth Cir.1985);
Frederick Davis, Judicial Review of Rulemaking: New Pat-
terns and New Problems, 1981 DUKE L.J. 279, 285-90. Al-
though one court has held that the Clean Air Act, 42 U.S.C.
§ 7607(b), deprived it of jurisdiction to review EPA regula-
tions when they are applied, see Potomac Elec. Power Co. v.
EPA, 650 F.2d 509, 513 (4th Cir.1981), we have ruled that
preclusion must be explicit for review to be barred in an en-
forcement action, see Indep. Cmty. Bankers of Am. v. Bd. of.
Governors of Fed. Reserve Sys., 195 F.3d 28, 34
(D.C.Cir.1999), and that even express preclusion may not
operate when the issue would have been unripe during the
period of statutory review. See Clean Air Implementation
Project v. EPA, 150 F.3d 1200, 1204 (D.C.Cir.1998). Per-
haps the congressional intent reflected in judicial review pro-
visions such as § 7607(b) of the Clean Air Act may also
demand adjustments in the Reno v. Flores or NCIR test for
reviewing facial attacks on regulations, assuming the tests are
not constitutionally compelled. See City of Chicago v.
Morales, 527 U.S. at 77 (Scalia, J., dissenting).

Whatever the outcome in such cases, the situation here is
not comparable. Our circuit does not have exclusive jurisdic-
tion over Park Service regulations, and judicial review is not

15a

confined to a particular time period. Nothing would preclude
a concessioner from bringing an action for a declaratory
judgment that the regulation, as applied to the concessioner,
deprives it of a contractual right in violation of the savings
clause. In fact, one of the consolidated actions in the district
court was such a suit. Amfac’s complaint alleged that its
1969 contract for the Grand Canyon was about to-expire, that
the contract contained an implied preferential nght of re-
newal arising “from the circumstances of the formation of the
1969 contract,” that the Park Service’s regulation denied the
existence of such an implied term, and that the regulation as
applied to Amfac therefore violated § 415 of the 1998 Act.
Although § 51.102 may be valid on its face, this would not
necessarily doom Amfac’s as-applied challenge.

With this in mind, we return to the concessioners’ asser-
tion that if “even one concessioner has [evidence showing an
implied right of renewal], the regulations denying those
rights across-the-board are unlawful.” Brief for Appellants at
27. We do not need to choose between Reno v. Flores or
NCIR to dispose of that contention. Not even First Amend-
ment overbreadth analysis — which embodies a far more dif-
ficult standard for laws to satisfy than the one the Court
formulated in Salerno — would render a law facially invalid
because of the prospect of a single invalid application. An
overbreadth attack will succeed only if the legislation is sub-
stantially overbroad — that is, only if the law “reaches a sub-
stantial number of impermissible applications.” New York v.
Ferber, 458 U.S. 747, 771 (1982). That there might be one
invalid application is therefore far from enough to make the
regulation unlawful under any of the standards we have men-
tioned.

Perhaps recognizing as much, the concessioners assert
that “some contracts might as a factual matter include the
[renewal] right as a bargained-for term,” a “possibility” (de-
spite obstacles posed by the parol evidence rule and perhaps
statutes of fraud) they think is enough to render the regula-

16a

tion unlawful. Brief for Appellants at 29. But far more is
demanded before a regulation may be declared facially inva-
lid. Under Reno v. Flores, § 51.102 must of course be sus-
tained on its face because there are circumstances in which
applying the regulation would not be inconsistent with § 415
of the 1998 Act. The regulation’s requirement of an express
contract term, for instance, properly eliminates claims of an
implied renewal right based on the Christian doctrine alone.
Even under the more relaxed standard of NCIR, it is not
enough that “some contracts might as a factual matter” con-
tain an implied renewal night. To repeat, that “the regulation
may be invalid as applied in some cases, however, does not
mean that the regulation is facially invalid because it is with-
out statutory authority.” NCIR, 502 U.S. at 188. We there-
fore reject the concessioners’ facial attack on § 51.102.

In reaching this result we have followed a course differ-
ent than that of the district court. We should explain why.
The district court thought the “lawfulness of the defendants’
regulations turns on whether the plaintiffs each have a con-
tractual right to preference renewal.” 142 F. Supp. 2d at 71.
With this we agree. We also agree — as our discussion of
the Christian doctrine indicates — with the district court’s
conclusion that the 1965 Act did not itself confer a contrac-
tual renewal right on the concessioners. Jd. at 72. As to the
concessioners’ allegations that they had an implied-in-fact
contract embodying their nght of renewal, the court rejected
these claims on the basis that “the administrative record pro-
vides no indication that the parties had the mutual under-
standing that the contract contained the renewal terms.” /d.
at 73. (The court must have had in mind all existing conces-
sion contracts, not just one.) The court added that the admin-
istrative record “is wholly devoid of information suggesting
that the [Park Service] intended the renewal term to be part
of the contract.” Jd. But that is entirely understandable in
light of the fact that the Park Service’s proposed rule dealing
with nights of renewal did not contain the restriction requir-

17a

ing the renewal right to be spelled out as an express term.
See Concessions Contracts, 64 Fed. Reg. 35,516, at 35,535
(proposed June 30, 1999). The concessioners thus had no
reason to submit evidence of implied renewal rights in each
of their contracts, assuming this sort of evidence would have
been allowed in the rulemaking proceeding or could have
been mustered. Moreover, the Park Service never indicated
that its final regulation rested on the district court’s rationale.
See SEC v. Chenery, 332 U.S. 194, 196 (1947). After deny-
ing that the right could be inferred from the 1965 Act, the
Park Service explained that an implied renewal nght “is in-
consistent with the express terms of almost all current NPS
concession contracts,” 65 Fed. Reg. at 20,633. Most con-
tracts, according to the Park Service, contained a provision
along these lines:

This Contract [or permit] and the administration of
it by the Secretary shall be subject to the laws of
Congress governing the Area and rules, regulations
and policies whether now in force or hereafter en-
acted or promulgated.

Id. But that begs the question the concessioners posed here
(and in the rulemaking, see Comments of the National Park
Hospitality Ass’n at 23 (Oct. 14, 1999)). The savings clause
of the 1998 Act is one of the “laws of Congress” to which
this contractual provision refers. If a concessioner has an
implied right of renewal in a pre-1998 contract, the savings
clause preserves it. The Park Service does not deny the pos-
sibility of an implied contractual provision — that is, an un-
written one — in government contracts. See Willard L.
Boyd, III & Robert K. Huffman, The Treatment of Implied-
in-Law and Implied-in-Fact Contracts and Promissory Es-
toppel in the United States Claims Court, 40 CATH. U. L.
REV. 605 (1991); Michael C. Walch, Note, Dealing with a
Not-so-Benevolent Uncle: Implied Contracts with Federal
Government Agencies, 37 STAN. L. REV. 1367 (1985). The
district court, quoting Hercules, Inc. v. United States, 516

18a

U.S. 417, 424 (1996), summarized the law on the subject: an
implied-in-fact contract requires a meeting of the minds,
which may be inferred from the “conduct of the parties show-
ing, in light of the surrounding circumstances, their tacit un-
derstanding.” The concessioners alleged that there have been
such meetings of the mind, at least in some instances. None-
theless, we agree with the district court that the regulation is
facially valid. As we explained earlier, the possibility that
one or some concessioners had an implied-in-fact renewal
right is not a sufficient basis for holding § 51.102 of the regu-
lations invalid on its face.

This still leaves the allegations in Amfac’s complaint that
§ 51.102 was inconsistent with the savings clause of the 1998
Act as applied to Amfac’s concession contract for the Grand
Canyon. Complaint of Amfac Resorts at {J 21, 41. Amfac
entered into that contract in 1969. The contract expired on
December 31, 2001, after the district court’s judgment. Am-
fac turned out to be the only offeror and so the government
argues that its as-applied challenge to the right-of-renewal
regulation is moot: “Amfac can have no ‘preference’ for [the
Park Service] to consider when there are no other offerors.”
Brief for Appellees at 33. Even if Amfac eventually won the
Grand Canyon contract, a subject about which we are not in-
formed, we do not believe its as-applied challenge would
necessarily be moot. Amfac argues that because § 51.102
threw its alleged implied renewal right in doubt, it “was
forced to bid more generously for the Grand Canyon contract
than it otherwise would have.” Reply Brief for Appellants at
16. If this assertion can be proven, see Lujan v. Defenders of
Wildlife, 504 U.S. 555 (1992), then Amfac continues to suf-
fer an injury and the case is not moot. See Scheduled Air-
lines Traffic Offices v. Dep't of Def., 87 F.3d 1356, 1358
(D.C.Cir.1996).

Amfac can succeed in its claim that the regulation is inva-
lid as-applied to its 1969 Grand Canyon contract only if it
can prove the essential predicate — that the regulation, in

19a

contradiction to the savings clause of the 1998 Act, deprived
it of a contractual right. Amfac therefore should be allowed
to adduce proof of its alleged implied right of renewal and
should be permitted reasonable discovery to this end. The
district court refused to allow any discovery on the ground
that judicial review of the regulation must be confined to the
administrative record, except in limited circumstances not
presented here. 143 F. Supp. 2d at 10-13. See Am. Bankers
Ass'n v. Nat’l Credit Union Admin., 271 F.3d 262, 266-67
(D.C.Cir.2001); Esch v. Yeutter, 876 F.2d 976, 991-92
(D.C.Cir.1989). We said in American Bankers, with respect
to a claim that a regulation conflicted with a statute, that the
court did not even need the administrative record to deter-
mine the validity of the regulation. 271 F.3d at 266-67. But
we were speaking there of a facial attack on the regulation.
We agree with the district court’s denial of discovery to that
extent. Amfac’s as-applied claim is another matter. Its evi-
dence of an implied renewal right would not be presented to
show what the Park Service did or did not consider in prom-
ulgating § 51.102 of the regulations. It would be presented
instead to show that the regulation would deprive it of a con-
tractual right in contravention of the savings clause in the
1998 Act. In this respect, the evidence Ainfac proposes to
adduce is akin to proof of its injury. Those challenging
agency action must establish that they have standing and to
do this, they must prove that the action causes injury to them.
Lujan, 504 U.S. at 560-61. They are not confined to the ad-
ministrative record. Far from it. Beyond the pleading stage,
they must support their claim of injury with evidence. Jd. So
here. In mounting an as-applied challenge to a regulation,
whether in defense of an enforcement action or as here in an
action for a declaratory judgment, the party making the chal-
lenge may — indeed, in most instances must — present evi-
dence outside the administrative record to show why its
particular circumstances render the regulation unlawful.

20a

We therefore reverse the district court’s grant of sum-
mary judgment on Amfac’s as-applied challenge to the pro-
spectus for concessions at the Grand Canyon National Park.
In doing so, we recognize that one of the claims of another
plaintiff, Hamilton Stores, Inc., might be construed as an as
applied challenge similar to that of Amfac. Complaint of
Hamilton Stores, Inc. at § 21. But the concessioners’ brief
presents no argument to this effect; in fact, neither the con-
cessioners’ brief nor their reply brief even mentions this por-
tion of the Hamilton Stores complaint. We thus view the
claim, which the district court rejected, as having been
waived on appeal. See, e.g., Doe v. Dist. of Columbia, 93
F.3d 861, 875 n.14 (D.C.Cir. 1996) (per curiam).

Il.
A.

The 1998 Act, as did the 1965 Act, recognized that the
United States owns all capital improvements constructed on
federal land within the National Park System. 16 U.S.C.
§ 5954(d). Nonetheless, the 1998 Act gave concessioners a
“leasehold surrender interest” in any “capital improvement”
the concessioner “constructs” “pursuant to a concession con-
tract.” 16 U.S.C. § 5954(a). The Act defines “capital im-
provement” as “a structure, fixture, or nonremovable
equipment provided by a concessioner pursuant to the terms
of a concession contract.” 16 U.S.C. § 5954(e). When the
concession contract expires or is terminated, the incumbent is
entitled to receive from its successor (or the government) the
valve of this interest. 16 U.S.C. § 5954(c). The amount of
each concessioner’s “leasehold surrender interest” — or, as
the parties call it, LSI — is “equal to the initial value (con-
struction cost of the capital improvement), increased (or de-
creased)” by a percentage measured by the Consumer Price
Index, less depreciation. 16 U.S.C. § 5954(a)(3). If the ex-
piring concession contract is renewed, the concessioner’s LSI
carries over. 16 U.S.C. § 5954(b).

2la

The plaintiff-concessioners are unhappy with the Park
Service’s regulations implementing these and other LSI pro-
visions of the 1998 Act. They say that “‘capital improve-
ment’ is a well-recognized technical accounting term that all
companies, as a matter of financial reporting, tax accounting,
and sound business practice use to distinguish upgrades to
facilities from ordinary ‘repair and maintenance’ costs.”
Brief for Appellants at 41. For support they cite an affidavit
from an accountant submitted by Amfac in the district court.
But the district court refused to consider, in this facial chal-
lenge, affidavits not submitted as part of the administrative
record, 142 F. Supp. 2d at 73, and so shall we. Concession-
ers have not attempted to show why affidavits outside the
agency record should be considered. See Steven Stark &
Sarah Wald, Setting No Records: The Failed Attempt to
Limit the Record in Review of Administrative Action, 36
ADMIN. L. REV. 333, 341-54 (1984). Still, we may acknowl-
edge the standard accounting definition cf capital expendi-
ture — an expenditure that extends the useful life of the asset
or increases the asset’s value, and is not repair and mainte-
nance. Whether an expenditure fits within the first category
and thus must be depreciated or amortized, or the other cate-
gory and thus must be expensed, often calls for difficult, fact-
intensive judgments. See GLENN A. WELSCH & CHARLES T.
ZLATKOVICH, INTERMEDIATE ACCOUNTING 443-46 (8th
ed.1989); GARY L. SCHUGART, ET AL., SURVEY OF ACCOUNT-
ING 197-212 (6th ed.1988); GLENN A. WELSCH & DANIEL G.
SHORT, FUNDAMENTALS OF FINANCIAL ACCOUNTING 448-49
(5th ed.1987). As to tax accounting, which the concessioners
invoke without any citation to the law, we think this is en-
tirely beside the point. The tax code states that no deduction
shall be allowed for “[a]ny amount paid out for new build-
ings or for permanent improvements or betterments made to
increase the value of any property or estate.” 26 U.S.C.
§ 263. In practice, there is a decided tilt to capitalizing many
items because deductions are, as the Supreme Court put it in

22a

INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992),
“strictly construed.” That rule of interpretation, of course,
has no bearing on whether a particular expenditure by a con-
cessioner should be treated as an addition to its LSI. Besides,
we do not understand what the concessioners see as the prob-
lem here. The regulation of the Park Service repeats, word
for word, the statute’s definition of “capital improvement.”
Compare 16 U.S.C. § 5954(e) with 36 C.F.R. § 51.51. To
the extent the concessioners are claiming that it was incum-
bent upon the Park Service to add a gloss to the statutory
definition, a gloss drawn from accounting standards, they are
mistaken, as the district court held. See 142 F. Supp. 2d at
83. While agencies may have leeway in interpreting the stat-
utes they administer, there is no rule of law compelling them
to embellish what Congress has enacted.

The concessioners also complain about § 51.67 of the
regulations, 36 C.F.R. § 51.67, and the “Repair and Mainte-
nance Reserve” in the Park Service’s “Standard Concession
Contract,” 65 Fed. Reg. at 26,069. Section 51.67 provides
that concessioners do not earn LSI “for repair and mainte-
nance of real property improvements unless a repair and
maintenance project is a major rehabilitation.” “Major reha-
bilitation” is defined in 36 C.F.R. § 51.51 as a pre-approved
“comprehensive rehabilitation” project the “construction cost
of which exceeds fifty percent of the pre-rehabilitation value
of the structure.” (The phrase “repair and maintenance” is
not defined, in the regulations or in the 1998 Act.) The Stan-
dard Concession Contract requires concessioners to establish
a reserve fund for repairs and maintenance projects, which
“may include repair or replacement of foundations, building
frames, window frames, sheathing, subfloors, drainage, reha-
bilitation of building systems such as electrical, plumbing,
built-in heating and air conditioning, roof replacement and
similar projects.” 65 Fed. Reg. at 26,069.

The concessioners object that § 51.67 allows LSI only for
“projects costing more than 50% of a structure’s replacement

23a

costs....” 36 C.F.R. § 51.67. What types of “projects” they
do not say. If the project is a “capital improvement” it is
added to the LSI no matter what the cost of construction. See
142 F. Supp. 2d at 83. If the project is for repair and mainte-
nance it does not qualify, as even the concessioners agree.
The 50% regulation — § 51.67 — deals with the question
whether an outlay that would otherwise be considered an ex-
penditure for repair and maintenance should constitute a
capital improvement because, for instance, the repairs are so
extensive. How a particular project should be classified will
depend greatly on the particular facts, as it does even in tax
cases. See INDOPCO, Inc., 503 U.S. at 86. Nonetheless, the
parties quarrel about hypothetical projects. The Park Service
says that if a concessioner replaced a damaged dry wall or a
rotted beam in a building these would not qualify as capital
improvements and thus would not be included in the conces-
sioner’s LSI. Brief for Appellees at 36; 65 Fed. Reg. at
20,656. The concessioners argue that the cost of replacing a
hotel’s brick fireplace would be included. 142 F. Supp. 2d at
83. Replacement of a foundation, according to the conces-
sioners, also would clearly be a capital improvement; accord-
ing to the Park Service it would not qualify because a
foundation is “merely a component of a structure,” rather
than a “structure, fixture or nonremoveable equipment.”
Compare Brief for Appellants at 44 with Brief for Appellees
at 39. This last dispute arises because the repair and mainte-
nance reserve clause in the standard contract mentions foun-
dations. But all the clause says is that repair and
maintenance “may” include repair or replacement of founda-
tions. 65 Fed. Reg. at 26,069.

The district court, after considering these arguments and
others, thought it could not give a definitive answer to the
issues thus posed. Echoing Reno v. Flores, 507 U.S. at 301,
and NCIR, 502 U.S. at 188, without citing the cases, the court
ruled as follows: “the Court cannot say that the regulation,
on its face, will be unlawful in its every application. Thus,

24a

this challenge to the regulation must fail.” 142 F. Supp. 2d at
85. The court was referring only to the concessioners’ attack
on the “Repair and Maintenance Reserve” clause but we
think its reasoning applies equally to the 50% rule in § 51.67.
It is entirely possible that a project calling for repairs to a
roof, the replacement of floor boards, the renovation of wir-
ing and plumbing, and so forth would not ordinarily qualify
as a “capital improvement.” Yet if the total cost of the repair
project exceeded 50% of the pre-repair value of the structure
it would be added to the LSI. See 36 C.F.R. §§ 51.51, 51.67.
In that circumstance a concessioner would have no cause for
complaint. On the other hand, if the rehabilitation project
satisfied the statutory and regulatory definition of a “capital
improvement” it would be unlawful for the Park Service to
invoke § 51.67 and refuse to treat the expenditure as an addi-
tion to the concessioner’s LSI. We do not suggest that the
Park Service would do anything of the sort. See 65 Fed. Reg.
at 20,656-57. Our point is that on the face of the regulations,
the most we can imagine is that in some applications — de-
pending on how the Park Service administers the LSI regula-
tions — there may be a conflict with the statute. That is not a
sufficient basis for holding the regulations unlawful on their
face, for the reasons given in part I.B. of this opinion.

The concessioners have two other problems with the LSI
regulations. The first relates to 16 U.S.C. § 5954(a)(3) and
the valuation of LSI: each concessioner’s “leasehold surren-
der interest is equal to the initial value (construction cost of
the capital improvement), increased (or decreased)” by a per-
centage measured by the Consumer Price Index, less depre-
ciation. The implementing regulation, 36 C.F.R. § 51.51,
defines “construction cost” as “the total of the incurred eligi-
ble direct and indirect costs necessary for constructing or in-
stalling the capital improvement....” “Eligible direct and
indirect costs” are costs “in amounts no higher than those
prevailing in the locality of the project,” id. It is this “local-

25a

ity” limitation to which the concessioners object. Projects in
national parks, they tell us, are almost always more expen-
sive to construct than “similar private projects in nearby lo-
calities, and Congress could not reasonably have intended
that concessioners swallow such costs without LSI credit,” a
point the Park Service does not dispute. Brief for Appellants
at 47-48. But as the Park Service points out, the concession-
ers’ argument assumes that “locality” means outside the na-
tional park. The regulations do not so state and we see no
basis for indulging in that assumption. It may be that the
Park Service’s particular interpretation regarding a particular
project in a particular national park could unreasonably limit
the valuation of a concessioner’s LSI. But that is no reason to
hold that the regulation conflicts with the statute or that it is
arbitrary. If a concessioner has its own construction com-
pany, as some apparently do, nothing in the 1998 Act re-
quires the Park Service to accept whatever amount the
concessioner decides to charge itself for the construction
work. See 65 Fed. Reg. at 20,651. Like the district court, we
therefore sustain the regulation.

The concessioners’ remaining problem with the LSI regu-
lations deals with 16 U.S.C. § 5954(a)(5): if the conces-
sioner “makes a capital improvement to an existing capital
improvement in which the concessioner has a leasehold sur-
render interest, the cost of such additional capital improve-
ment shall be added to the then current value of the
concessioner’s leasehold surrender interest.” Their claim is
that § 51.65 of the regulations conflicts with this provision.
The regulation states:

A concessioner that replaces an existing fixture in
which the concessioner has a leasehold surrender in-
terest with a new fixture will increase its leasehold
surrender interest by the amount of the construction
cost of the replacement fixture less the construction
cost of the replaced fixture.

26a

36 C.F.R. § 51.65. This regulation is unlawful, according
to the concessioners, because there is nothing in the statute
allowing subtractions from a concessioner’s LSI. They also
believe the calculations required by the regulation would be
an administrative nuisance. In the Grand Canyon concession,
for instance, there are about 300 structures with many thou-

sands of fixtures.

The district court sustained the regulation for reasons

given by the Park Service, reasons we also find persuasive.
Without the regulation, concessioners would receive a wind-
fall every time they removed a fixture and replaced it with a
new one: -

If a [concessioner] with a leasehold surrender inter-
est in the hotel were to replace the hotel furnace
once every five years for 15 years, the plaintiffs’
proposed accounting would be to increase the lease-
hold surrender interest three separate times by the
cost of the furnace. Under this approach, the [con-
cessioner] would hold a leasehold surrender interest
equal to four furnaces, even though the hotel would
only contain one.

142 F. Supp. 2d at 88 n.16. As to the concessioners’ tex-
tual argument, it is true that the statute speaks only of addi-
tions not subtractions. But under the regulation the
calculation is of net additions to LS] — the difference be-
tween the cost of the new fixture and the discarded one.
When concessioners replace fixtures for a greater cost, their
LSI will increase. The regulation deals with how much the
increase should be. The statute, which speaks in terms of
additions not replacements, does not address that subject.
We therefore reject the concessioners’ argument that § 51.65
of the regulations is inconsistent with 16 U.S.C. § 5954(a)(5).
We reject as well their argument that the regulation is unrea-
sonable. The Park Service’s policy of avoiding the windfalls
that would result without the regulation is reason enough to

27a

sustain § 51.65, despite the administrative burdens it may
generate.

Il.

The concessioners claim the Park Service wrongly ex-
cluded concessions contracts from coverage under the Con-
tract Disputes Act, 41 U.S.C. § 601 et seg. See 36 C.F.R.
§ 51.3; 65 Fed. Reg. at 20,635.

Enacted in 1978, the Contract Disputes Act provides an
alternative forum for government contract disputes. Rather
than seeking judicial relief in the Court of Federal Claims, a
contractor may appeal decisions by a contracting official to
an administrative board within that agency. 41 U.S.C. § 607.
The board’s decision may be appealed to the U.S. Court of
Appeals for the Federal Circuit. 41 U.S.C. § 607(g).

Section 51.3 of the regulations states that concession con-
tracts are not “contracts” within the meaning of the Contract
Disputes Act. 36 C.F.R. § 51.3 (2000). With this we agree.
The Act applies to any “express or implied contract” for the
“procurement” of “property,” “services” or “construction.”
41 U.S.C. § 602(a)(2). A procurement contract, the Park
Service reasoned, “is a contract for which the government
bargains for, and pays for, and receives goods and services.”
65 Fed. Reg. at 20,635. Concession contracts are not of that
sort. Their function is not to procure services or goods for
the government. Instead, as the Park Service put it, conces-
sion contracts “authorize third parties to provide services to
park area visitors.” Jd. While the Park Service does not ad-
minister the Contract Disputes Act, and thus may not have
interpretative authority over its provisions, its reasoning finds
support not only in the terms of that statute but also in the
National Parks Omnibus Management Act of 1998, under
which the Park Service may enter into concession contracts
“to authorize a person, corporation or other entity to provide
accommodations, facilities and services to visitors to” na-
tional parks. 16 U.S.C. § 5952. The Committee reports ac-

28a

companying the 1998 Act also concluded that concession
“contracts do not constitute contracts for the procurement of
goods and services for the benefit of the government or oth-
erwise,” S. REP. NO. 105-202, at 39 (1998); H.R. REP. No.
105-767, at 43 (1998), a position the Park Service had
reached earlier with respect to concession contracts under the
1965 Act. See, e.g., Concessions Contracts and Permits, 57
Fed. Reg. 40,496, at 40,498 (Sept. 3, 1992) (reiterating that
the Park Service “has never considered [concessions con-
tracts] a type of federal procurement contract”). The Court
of Federal Claims, considering the nature of concession con-
tracts, also concluded that “this arrangement does not consti-
tute a procurement, but is a grant of a permit to operate a
business.” YRT Servs. Corp. v. United States, 28 Fed. Cl.
366, 392 n.23 (1993). The decision rested, in part, on the
fact that “the government is not committing to pay out gov-
ernment funds or incur any monetary liability.” Jd.

As against this analysis, the concessioners cite several
decisions of the Interior Department Board of Contract Ap-
peals [IBCA], a body created by Interior Department regula-
tions, see 41 U.S.C. § 607(a); 43 C.F.R. § 4.100 ef seg.
(2000). The IBCA has held that the Contract Disputes Act
applies to concession contracts. See, e.g., Appeal of Watch
Hill Concession, Inc., IBCA No. 4284-2000, 2001 WL
170911 (2001); Appeal of Nat'l Park Concessions, Inc.,
IBCA No. 2995, 1994 WL 462401 (1994). But the decisions
of this body “on any question of law shall not be final or
conclusive.” 41 U.S.C. § 609(b). And the IBCA’s rationale
for determining that concession contracts are procurement
contracts is flawed. In its first opinion to consider the issue,
the IBCA acknowledged that the Contract Disputes Act does
not cover all contracts but then assumed that the Act does
apply unless coverage is explicitly foreclosed. See Appeal of
R & R Enters., IBCA No. 2417, 1989 WL 27790, at 24-25
(Mar. 24, 1989). Nothing in the Act suggests such a sweep-
ing presumption. Another IBCA opinion states that if any

|
;
.

wore

29a

“benefit” can be traced to the government, then the Contract
Disputes Act must apply. Appeal of Nat'l Park Concessions,
Inc., IBCA No. 2995, 1994 WL 462401, at 14 (Aug. 18,
1994). The primary purpose of concessions contracts is to
permit visitors to enjoy national parks in a manner consistent
with preservation of the parks. 16 U.S.C. § 5951. That the
government receives monetary compensation or incidental
benefits from the concessioners’ performance is not enough
to sweep these contracts into the ambit of the Contract Dis-
putes Act.

IV.

The concessioners’ last complaint deals with the portion
of the new regulations designed to deal with transactions in-
volving corporate concessioners (see 65 Fed. Reg. at 20,661).
One of the regulations states:

The concessioner may not assign, sell, convey,
grant, contract for, or otherwise transfer (such trans-
actions collectively referred to as “assignments” for
purposes of this part), without the prior written ap-
proval of the Director, any of the following:

(a) Any concession contract;

(c) Any controlling interest in a concessioner or
concession contract;

36 C.F.R. § 51.85(a) & (c). A similar regulation prohibits,
without prior approval, any “encumbrance” of a “controlling
interest in a concessioner.” 36 C.F.R. § 51.86(c). In the con-
cessioners’ view, the regulations extend beyond the statute.
The 1998 Act forbids any “concessions contract” from being
“transferred, assigned, sold, or otherwise conveyed or
pledged by a concessioner” without government approval.
16 U.S.C. § 5957(a). Approval must be given unless “the

30a

entity seeking to acquire a concessions contract is not quali-
fied” or the transfer or conveyance would otherwise ad-
versely affect performance of the contract in a manner
specified in 16 U.S.C. § 5957(b). The crucial difference be-
tween the regulations and the statute, the concessioners say,
is that the regulations require approval of transactions dealing
not only with the transfers or assignments of concession con-
tracts but also with changes in control of the concessioner.
The Park Service responds that its change-of-control rule en-
sures that unqualified persons do not wind up holding con-
cession contracts. Unlike individuals, a corporation can in
effect transfer a concession contract by selling its stock to
another entity. 65 Fed. Reg. at 20,661. As the Park Service
sees it, the regulations are a permissible construction of the
statutory phrase “otherwise conveyed or pledged,” an argu-
— which the district court agreed. 142 F. Supp. 2d at

How the Park Service regulations will operate does not
exactly leap from the pages of the Federal Register. It is easy
enough to see that if X corporation wanted to sell all its as-
sets, including its concession contract, it would first have to
get approval of the Director of the Park Service. No one
doubts that the regulation properly requires as much. The
Park Service also believes that if the non-public X corpora-
tion structured the transaction as a sale of 100% of its stock
instead of an asset sale, there would be no functional differ-
ence as far as the concession contract is concerned. See
Alarm Indus. Communications Comm. v. FCC, 131 F.3d
1066, 1070-71 (D.C. Cir.1997). It is only a short leap to the
conclusion that if, rather than a sale of 100% of the stock, X
corporation sold some lesser amount representing a control-
lations define controlling interest in much the same manner
as the Securities and Exchange Commission, see, e.g., 17
C.F.R. § 210.1-02(g), that is, not in terms of any particular
percentage of outstanding voting stock. Rather, a “controlling

3la

interest” in a corporate concessioner constitutes “sufficient
outstanding voting securities” of “the concessioner or related
entities that permits the exercise of managerial authority”
over the concessioner. 36 C.F.R. § 51.84.

Beyond these simple examples we enter a vale of ambi-
guity. Transactions of the sort just described are not the fo-
cus of the concessioners’ concern. Their problem is that the
regulations--as they read them — require Park Service ap-
proval of transactions undertaken by the concessioners’
“shareholders or their affiliates.” Brief for Appellants at 55.
But do they? The shareholders of incorporated concessioners
are typically not individuals but parent corporations. The
Park Service reports that “many” of its concessioners “are
corporations that hold a concession contract 4s their exclu-
sive business activity” and that almost all of the largest con-
cessioners are “wholly owned subsidiaries of larger
corporations.” 65 Fed. Reg. at 20,661. One of the plaintiffs
here, ARAMARK Sports and Entertainment Services, Inc., is
a wholly-owned subsidiary of ARAMARK/HMS Company,
which is a wholly-owned subsidiary of ARAMARK Sports
and Entertainment Group; Inc., which is a wholly-owned
subsidiary of ARAMARK Corporation, which is listed on the
New York Stock Exchange. Brief for Appellants at iv.

Wholly-owned means, in the case of incorporated sub-
sidiaries, that the parent corporation holds all of the subsidi-
ary corporation’s stock. What worries the concessioners is
that transactions by the parent could potentially require Park
Service approval if a change in control would result. But the
regulations do not read that way. The critical provision is 36
C.F.R. § 51.8. It speaks only of sales, assignments, convey-
ances and so forth by the “concessioner.” The term “conces-
sioner,” in regulatory parlance, “is an individual, corporation,
or other legally recognized entity that duly holds a conces-
sion contract,” 36 C.F.R. § 51.3 — a definition that at least
on its face encompasses only the subsidiary corporation, not
the parent. It therefore appears that if the parent corporation

32a

engages in a sale-of-control transaction, this would not re-
quire approval because the concessioner — the subsidiary
corporation — would not be doing the selling. The attorneys
for the Park Service say, in their brief, that the regulations do
indeed cover transactions by the corporate concessioner’s
parent company. Brief for Appellees at 53-54. But they do
not parse the language of the regulations, and they point to
nothing in the Park Service’s explanation of its regulations
that goes so far. In fact, the Park Service justified its regula-
tions on the basis that it would be “anomalous” if a “corpo-
rate concessioner” could sell “its stock to a new party (sale of
a controlling interest)” without having to seek Park Service
approval. 65 Fed. Reg. at 20,661. If, despite the language of
the regulations, transactions at the parent level are also sup-
posed to be covered, we are far trom certain how the Park
Service intends to implement its rules. An investor might
begin purchasing stock of the parent corporation of a corpo-
rate-concessioner on the open market. Must the concessioner
corporation go to the Park Service and ask for approval of the
outsider’s purchases of the parent when the outsider’s per-
centage of the outstanding shares reaches some magic num-
ber? That makes no sense. Neither the concessioner
corporation nor the parent corporation has any control over
the purchaser. Perhaps this is why the regulation seems to
speak only in terms of the concessioner selling its stock. If
the regulations do not cover the transaction just mentioned,
but do cover a sale of control by a parent corporation, the
Park Service would have to justify a rule that allows an out-
sider, a complete stranger, to gain a “controlling interest”
through open market purchases but requires approval before
the parent makes a block sale to the same person. Control of
the parent, and thus of the subsidiary concessioner, would
transfer in both situations, and under the Park Service’s the-
ory, so would the concession contract, yet the one transaction
would be regulated and the other not.

33a

The short of the matter is that we do not know whether
the problems the concessioners identify exist. We cannot be
sure that the Park Service will apply its sale-of-control regu-
lations to transactions involving only sales of stock by corpo-
rate concessioners (as distinguished from open market sales
by shareholders or sales by a parent company of its stock).
The questions thus raised, and the other questions posed by
the many possible forms of corporate restructuring (see, e.g.,
1 MARTIN D. GINSBURG & JACK S. LEVIN, MERGERS, AC-
QUISITIONS, AND BUYOUTS 105 (2001)), present “too many
imponderables” to permit judicial review at this time. Clean
Air Implementation Project v. EPA, 150 F.3d at 1200. This
aspect of the case, in other words, is not ripe. See Media Ac-
cess Project v. FCC, 883 F.2d 1063, 1070 (D.C.Cir.1989).
The “classic institutional reason” for postponing review is the
“need to wait for a ‘rule to be applied [to see] what its effect
will be,’“ Louisiana Envtl. Action Network v. Browner, 87
F.3d 1379, 1385 (D.C.Cir.1996) (quoting Diamond Sham-
rock Corp. v. Costle, 580 F.2d 670, 674 (D.C.Cir.1978)).
The issues here can be presented in a more “concrete” set-
ting. Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967);
Ass'n of Am. R.R., 146 F.3d 942, 946 (D.C.Cir.1998). The
regulations state that “[a]ssignments” without the prior ap-
proval of the Park Service will be considered “null and void”
and will be viewed as a “material breach of the applicable
concession contract which may result in termination of the
contract for cause.” 36 C.F.R. § 51.88. Whether this means
the Park Service will deem transfers of controlling interests
in a concessioner’s parent as “null and void” is not at all
clear. But the prospect certainly can give rise to an interested
party’s seeking the Park Service’s judgment that its proposed
transaction does not need approval. A lawsuit could be
brought if the concessioner is dissatisfied with the answer.
Then at least the court would have some idea of what the
Park Service thinks its regulations cover. Then too the valid-
ity of the regulations, as thus interpreted, could be deter-

34a

mined in light of the language of the statute, which speaks
only of transfers of concession contracts.

The possible hardship to the concessioners in waiting
does not alter our conclusion that the issues are not ripe. No
concessioner has indicated that a transfer of control is immi-
nent. We therefore have no reason to believe that in the im-
mediate future they will have to alter their conduct to their
disadvantage. Contrast Abbott Labs., 387 U.S. at 152. It
may be that matters cannot be sorted out without further liti-
gation but that is not the sort of hardship we recognize in
evaluating whether a case is ripe for review. See, e.g., Clean
Air Implementation Project, 150 F.3d at 1206.

Our conclusion that this aspect of the case is not ripe dif-
fers from that of the district court, which ruled against the
concessioners’ claim on its merits. We therefore vacate the
district court’s judgment in this respect.

***

The judgment of the district court is affirmed in part, re-
versed in part and vacated in part. The case is remanded for
further proceedings, consistent with this opinion, on Amfac’s
as-applied challenge to regulations concerning the preferen-
tial nght of renewal.

So ordered.

35a

APPENDIX B

United States District Court,
District of Columbia.

AMFAC Resorts, L.L.C., Plaintiff,
Ve

UNITED STATES Department OF THE INTERIOR, ET AL., De-
fendants.

NATIONAL PARK Hospitality ASSN., Plaintiff,
Vv.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., De-
fendants.

HAMILTON Stores, INC., Plaintiff,
Vv.

UNITED STATES Department OF THE INTERIOR, ET AL., De-
fendants.

ARAMARK SPORTS AND Entertainment SERVICES, INC., Plain-

tiff,

Vv.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., De-
fendants.

CIV.A. 00-2838, 00-2885, 00-2937,
00-3085.

May 23, 2001.
MEMORANDUM OPINION
LAMBERTH, District Judge.

a

Now before the Court is a group of cases that implicate a
variety of issues, all of which are covered in the defendants’
motion to dismiss, and the parties’ cross motions for partial

36a

summary judgment. At its heart, the dispute centers on the
National Park Service’s (“NPS”) treatment of current and
potential concessioners at various national parks. The plain-
tiffs — three of which are concessioners and one of which is
an association of concessioners — all allege that various NPS
regulations are contrary to Congressional pronouncements on
national park concession management.

On April 24, 2001, the Court niled that the plaintiffs were
not entitled to discovery beyond the administrative record,
and that certain confidential information could be shared with
experts, provided various conditions were observed. The
Court also ruled that day that Delaware North, Inc., a conces-
sioner, was entitled to intervene in this matter on behalf of
the defendants. Delaware North is a competitor of the plain-
tiffs, and seeks to become a concessioner in certain parks
where the plaintiffs currently hold concession contracts.

To summarize the Court’s holding, the Court first holds
that the plaintiffs’ Rule 56(f) motion to stay summary judg-
ment proceedings and take discovery must be DENIED.'
The Court next holds that the defendants’ motion to dismiss
must be DENIED with respect to the preferential nght to re-

' This issue was substantially addressed in the Court’s April 24,
2001 Opinion. In that Opinion, the Court determined that the
plaintiffs were not entitled to extra-record discovery. See Memo-
randum and Order, Apr. 24, 2001, at 11-13.

Federal Rule of Civil Procedure 56(f) “allows a summary
judgment motion to be denied; or the hearing on the motion to be
continued, if the nonmoving party has not had an opportunity to
make full discovery.” Celotex Corp. v. Catrett, 477 U.S. 317, 326
(1986). As the plaintiffs are not entitled to any discovery, a stay of
proceedings would not increase the plaintiffs’ “opportunity to
make full discovery.” Thus, the plaintiffs’ Rule 56(f) motion must
be denied.

37a

newal issue, but GRANTED with respect two other issues.’
Finally, the Court holds that the disputed regulations are
permissible in all respects save one. The defendants’ regula-
tions are generally concise, well explained, and responsive to
the many comments received from interested parties. The
defendants only run afoul of the law in their requirement that
concessioners bid on prospectuses or else lose their preferen-
tial right of renewal. An order consistent with this Opinion
shall issue separately this date.

As a preliminary matter, the Court 1 otes its jurisdiction
under 28 U.S.C § 1331. The plaintiffs’ well-pleaded com-
plaints present an issue of federal law, and all parties concede
as much. See Bnef for Plaintiffs, Feb. 28, 2001, at 14-15;
Brief for Defendants, Apr. 9, 2001, at 21. The law applicable
to the resolution of this case is federal law, whether in consti-
tutional, statutory, or common law form. See United States
v. Kimbell Foods, Inc., 440 U.S. 715, 726-27 (1979) (quoting
Clearfield Trust Co. v. United States, 318 U.S. 363, 366
(1943)) (“[A]gencies derive their authority to effectuate ...
transactions from specific Acts of Congress passed in the ex-
ercise of ‘constitutional function or power’, [and thus] their
rights, as well, should derive from a federal source.”’).

I. THE DEFENDANTS’ MOTION TO DISMISS
A. Background

The plaintiffs have been concessioners in various national
parks for the past 30 years.” Their concession contracts are

? These two issues are the plaintiffs’ claims regarding the timing
of compensation for a concessioner’s leasehold surrender interest,
see Part.II.N, and Hamilton Stores’ claim regarding the minimum
franchise fee for the Yellowstone Park concession contract. See

~ Part L.B.3.b.

* The Court notes that one of the plaintiffs, the National Park
Hospitality Association (“NPHA”), is not actually a concessioner.
Rather, it is an association of concessioners. Nonetheless, as the

38a

set to expire on December 31, 2001, and they are currently
interested in continuing as concessioners. To achieve this
goal, the plaintiffs must participate in a contracting process
dictated by the NPS. In the spring of 2000, the NPS modified
this process in light of recent legislation.“

The new contracting process is chiefly controlled by an
NPS regulation entitled “Concession Contracts.” 65 Fed.
Reg. 20630 (A

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0589%3A02. Public record. Not legal advice.
