National Industries for the Blind v. Department of Veterans Affairs

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

)
NATIONAL INDUSTRIES FOR THE )
BLIND, et al., )
)
Plaintiffs, )
)
v. )
)
DEPARTMENT OF VETERANS )
AFFAIRS, et al., )
)
Defendants. )
) No. 17-cv-0992 (KBJ)
)
ALPHAPOINTE, )
)
Plaintiff, )
)
v. )
)
DEPARTMENT OF VETERANS )
AFFAIRS, et al., )
)
Defendants. )
)

MEMORANDUM OPINION AND ORDER DENYING
DEFENDANTS’ MOTION TO STAY THE INSTANT PROCEEDINGS

On May 30, 2017, the United States Court of Federal Claims resolved a dispute

about the procurement policy that Congress intended for the Department of Veterans

Affairs (“the VA”) to use when deciding whether the products of veteran-owned small

businesses will be prioritized over those made by small businesses that employ blind

and severely disabled individuals. See PDS Consultants, Inc. v. United States, 132 Fed.

Cl. 117 (Fed. Cl. 2017). The Court of Federal Claims held, in essence, that when the

VA seeks to procure goods and services, veteran-owned small businesses get preference

1
over those that employ the blind and disabled, see PDS Consultants, 132 Fed. Cl. at

128, and this ruling—which involved the resolution of an apparent conflict between the

Javits-Wagner-O’Day Act (“JWOD”), 41 U.S.C. §§ 8501–06 (requiring federal agencies

to purchase certain items from small businesses that employ blind and disabled

individuals), and the Veterans Benefits, Health Care, and Information Technology Act

of 2006 (“VBA”), 38 U.S.C. §§ 8127–28 (mandating that the VA limit competition for

its procurement to veteran-owned small businesses under certain conditions)—is

currently on appeal to the Federal Circuit.

In the instant consolidated cases, Plaintiffs National Industries for the Blind,

Bosma Industries for the Blind, Winston-Salem Industries for the Blind (collectively,

“NIB Plaintiffs”) and Plaintiff Alphapointe have brought their own, substantively

similar challenges to the VA’s procurement practices. (See generally NIB Compl., ECF

No. 1; Alphapointe Compl., ECF No. 25.) Before this Court at present is a motion that

Defendants VA, VA Secretary David Shulkin, and the United States of America have

filed—and that Defendant-Intervenor PDS Consultants (“PDS”) supports—requesting a

stay of the instant proceedings pending the Federal Circuit’s ruling in PDS Consultants.

(See Mem. in Supp. of Defs.’ Mot. to Stay Proceedings (“Mot. to Stay”), ECF No. 20-1;

see also PDS’s Resp. in Supp. of Defs.’ Mot. to Stay Proceedings (“PDS Stay Br.”),

ECF No. 29.) Defendants point out that the complaints at issue here raise similar legal

issues to those that are now pending in the case before the Federal Circuit, and that the

parties overlap; therefore, Defendants request a stay in the interest of judicial

efficiency. (See Mot. to Stay at 10; PDS Stay Br. at 3–5.) 1 In opposition to the stay

1
Page-number citations to the documents that the parties have filed refer to the page numbers that the
Court’s electronic filing system automatically assigns.

2
motion, Plaintiffs argue, among other things, that the instant cases involve claims that

are different than those in PDS Consultants, and that the parties are largely distinct;

indeed, other than the VA defendants, only two of the five parties in the consolidated

matters before this Court are also parties in the Federal Circuit case. (See Pls.’ Opp’n

to VA’s Mot. to Stay Proceedings (“NIB Opp’n”), ECF No. 22, at 4–8; Pl.

Alphapointe’s Opp’n to Defs.’ Mot. to Stay Proceedings (“Alphapointe Opp’n”), ECF

No. 28, at 10–12.)

For the reasons explained fully below, this Court has concluded that Defendants’

motion to stay the instant proceedings must be DENIED. In short, Defendants have

failed to carry their burden of demonstrating that a stay of the instant proceedings is

warranted. Moreover, given that the VA is currently implementing the challenged

procurement policy and has expressed its intention to continue to do so during the

pendency of the Federal Circuit appeal (see Defs.’ Notice, ECF No. 42), equitable

considerations weigh heavily against the requested stay.

I. BACKGROUND

A. Factual Background

At issue in the present case is the potential tension between two federal statutes

that establish certain contracting priorities that the VA must implement when it

undertakes procurements for goods or services. (See Alphapointe Compl. ¶¶ 2–4; NIB

Compl. ¶¶ 2–3.) The JWOD, which was initially passed in 1938 and was amended in

1971, requires all government agencies (including the VA) to purchase certain products

and services from designated nonprofits that employ blind and otherwise severely

disabled people. See 41 U.S.C. §§ 8501–06. Under the JWOD’s statutory scheme, the

3
United States AbilityOne Commission, an independent agency, is charged with

maintaining a procurement list, and “[a]n entity of the federal Government intending to

procure a product or service on the procurement list . . . shall procure the product or

service” from a qualified nonprofit on that list. Id. § 8504(a). The AbilityOne

Commission also oversees the addition of items to the procurement list (hereinafter

called “the AbilityOne List”). See id. § 8503(a). Thus, by statute and regulation,

certain designated non-profit manufacturers have long been preferenced with respect to

procurements in the government-contracting realm. 2

More recently, in 2006, Congress enacted the VBA, which, among other things,

established the Veterans First Contracting Program (“VFCP”). The VFCP applies only

to procurement by the VA, and requires that agency to set goals for providing contracts

to veteran-owned small businesses. See 38 U.S.C. § 8127(a). It also directs the VA to

give procurement priority to veteran-owned small businesses under certain conditions.

Specifically, before undertaking a procurement, VA contracting officers must conduct

an analysis—commonly referred to as the “Rule of Two”—to determine whether there

are at least two veteran-owned small businesses capable of performing the work. See

id. § 8127(d). If the officer has a “reasonable expectation” that at least two such

contractors will submit offers and that “the award can be made at a fair and reasonable

price that offers best value to the United States[,]” the VA must limit competition for

that contract to veteran-owned small businesses only. Id.

Since the passage of the VBA, the VA has issued a number of regulations and

policies that guide its contracting officers in applying the respective priorities embodied

2
The regulations that implement this mandate are enshrined in the Federal Acquisition Regulations
(“FAR”). See 48 C.F.R. subpart 8.7.

4
in the JWOD and the VBA. 3 For example, when the VA initially promulgated the rule

that implements the VBA, it did so in a way that maintained AbilityOne’s priority

status. (See Alphapointe Compl. ¶ 4; NIB Compl. ¶ 3.) Then, in 2016, the Supreme

Court held that the VA must conduct the Rule of Two analysis when awarding contracts

under the Federal Supply Schedule, see Kingdomware Techs., Inc. v. United States, 136

S. Ct. 1969 (2016), and in response to that decision, the VA issued a new policy in the

form of a “Class Deviation” from the VA Acquisition Regulation (“the VAAR”) (“the

2016 Class Deviation”), but kept the policy requiring mandatory priority for the

AbilityOne program intact. (See Alphapointe Compl. ¶ 5; NIB Compl. ¶ 4.) 4

In March of 2017, the VA issued an amended Class Deviation (“the 2017 Class

Deviation”). (See Alphapointe Compl. ¶ 38; NIB Compl. ¶ 31.) The 2017 Class

Deviation requires VA contracting officers to conduct the aforementioned Rule of Two

analysis before purchasing certain items on the AbilityOne List, depending upon when

the items were added to the list. For any items added to the AbilityOne List on or after

January 7, 2010—the date on which the VA issued its initial regulations implementing

the VBA—the Rule of Two analysis is required. (See Alphapointe Compl. ¶¶ 39–40;

NIB Compl. ¶¶ 32–33.) But for items that were added to the AbilityOne List before

January 7, 2010, the 2017 Class Deviation requires VA contracting officers to continue

3
For a summary of the various policies the VA has issued over the years, see Kingdomware Techs., Inc.
v. United States, 136 S. Ct. 1969 (2016), and Angelica Textile Servs., Inc. v. United States, 95 Fed. Cl.
208 (Fed. Cl. 2010).
4
In this context, a class deviation is “[t]he issuance of policies or procedures that govern the
contracting process or otherwise control contracting relationships that are not incorporated into agency
acquisition regulations[,]” in this case the VAAR. 48 C.F.R. § 1.401; see also id. § 801.404 (granting
VA procurement leadership the authority to “authorize class deviations from the FAR and VAAR when
a class deviation is in the best interest of the Government”).

5
to purchase the items from AbilityOne nonprofits without applying the Rule of Two.

(See id.)

The Court of Federal Claims entertained a challenge to the 2017 Class Deviation

in the context of a bid protest that a veteran-owned small business brought in PDS

Consultants, Inc. v. United States, 132 Fed. Cl. 117 (Fed. Cl. 2017). 5 In that case, PDS

(the Defendant-Intervenor in the instant consolidated cases) filed a bid protest action

against the VA to challenge the agency’s purchase of eyewear from Winston-Salem

Industries for the Blind (a nonprofit that intervened as a defendant in the PDS

Consultants matter and is one of the plaintiffs here). See id. at 119–20. On May 30,

2017, the Court of Federal Claims issued an opinion finding that the VA should have

applied the Rule of Two to all procurements that had taken place after the passage of

the VBA in 2006, regardless of when the product or service was placed on the

AbilityOne List. See id. at 126. That court thus concluded that the 2017 Class

Deviation was “contrary to the VBA statute” insofar as that policy suggested that

“items added to the List prior to 2010 are forever excepted from the VBA’s

requirements[,]” and as a result, the court rejected the VA’s application of the 2017

Class Deviation to the eyewear contracts at issue. Id. at 128.

Winston-Salem noticed an appeal in the PDS Consultants case on July 28, 2017.

(See Ex. 1 to Resp. of NIB Pls. to Defs.’ Notice, Docketing Statement, PDS

Consultants, Inc. v. United States, No. 17-2379 (Fed. Cir. Sept. 1, 2017) (“PDS Appeal

Docketing Statement”), ECF No. 45-1, at 2.) And because the Court of Federal Claims

5
Although the bid protest action was initially brought in 2016, the court in PDS Consultants ultimately
addressed the 2017 Class Deviation because that policy was issued while that litigation was pending.
See PDS Consultants, 132 Fed. Cl. at 124–25.

6
has granted a stay of its judgment pending appeal, see PDS Consultants, Inc. v. United

States, No. 16-1063C, 2017 WL 3821803, at *1 (Fed. Cl. Sept. 1, 2017), the VA has

continued to implement the 2017 Class Deviation with respect to its procurements, even

as the parties are presently litigating issues related to that policy in the Federal Circuit.

(See Defs.’ Notice at 2; see also PDS Appeal Docketing Statement at 3 (stating that

whether the VA must perform the Rule of Two analysis under the VBA before it

purchases items from AbilityOne nonprofits is one of the issues to be decided on

appeal).)

B. Procedural History

On May 24, 2017, the NIB Plaintiffs filed a complaint in this Court that claimed

that the 2017 Class Deviation is both substantively unlawful and procedurally defective

under the Administrative Procedure Act (“APA”). (See NIB Compl. ¶ 6.) The NIB

Plaintiffs argue that the 2017 Class Deviation reflects “an unreasonable interpretation

of the VBA that ignores the mandatory language of the JWOD Act[,]” and these

Plaintiffs also allege that the VA issued the 2017 Class Deviation without complying

with the notice-and-comment requirements of the APA, the Office of Federal

Procurement Policy Act (“OFPPA”), and the FAR. (See id.) As relief, the NIB

Plaintiffs seek a declaration that the 2017 Class Deviation violates the APA, the

OFPPA, and the FAR (see id., Request for Relief, ¶ 1), as well as a permanent

injunction prohibiting enforcement of the 2017 Class Deviation (see id., Request for

Relief, ¶ 2).

Plaintiff Alphapointe filed its complaint on July 28, 2017. (See Alphapointe

Compl. (originally filed in Civ. No. 17 – 1528); see also Notice of Related Case, ECF

No. 23.) Alphapointe challenges the 2017 Class Deviation, as well as an alleged newer

7
VA procurement policy that is purportedly reflected in a June 2017 email that

Alphapointe received from the VA. (See Alphapointe Compl. ¶¶ 44–46.) Alphapointe

argues that the VA’s policy regarding government-contracting preferences violates the

APA because the agency has arbitrarily and capriciously ignored the requirements of

the JWOD, and because the agency has failed to adhere to the notice-and-comment

requirements of the APA. (See id. ¶¶ 54–57.) As relief, Alphapointe seeks a

declaration that the 2017 Class Deviation violates the APA, as well as preliminary and

permanent injunctions prohibiting the VA from enforcing the 2017 Class Deviation.

(See id., Request for Relief, ¶¶ 1–3.) 6 This Court consolidated the NIB Plaintiffs’ and

Alphapointe’s cases on August 4, 2017.

In a motion filed on July 17, 2017, Defendants have asked this Court to stay the

instant proceedings pending the Federal Circuit’s resolution of the PDS Consultants

case. (See generally Mot. to Stay.) Defendants argue that, because PDS Consultants is

factually related to the matters at hand, “considerations of consistency and judicial

efficiency warrant application of the court-developed rule of practice by which the

second-filed case is stayed[.]” (Id. at 1.) Defendant-Intervenor PDS also supports the

stay on the grounds of judicial efficiency, and it further argues that both it and the

government would suffer hardship in the absence of a stay. (See PDS Stay Br. at 2, 5.)

For their part, the NIB Plaintiffs and Alphapointe vigorously oppose staying the instant

proceedings; they argue that this case should go forward despite the Federal Circuit

appeal because PDS Consultants involves different parties, different facts, and different

causes of action. (See Alphapointe Opp’n at 4; NIB Opp’n at 5.) Plaintiffs also

6
This Court denied Alphapointe’s motion for a preliminary injunction in an oral ruling during a hearing
that the Court held on September 15, 2017. (See Hr’g Tr., ECF No. 41, at 66:10–74:20.)

8
contend that a stay is not warranted because the government Defendants have not shown

that they would suffer any hardship if the action is allowed to proceed. (See

Alphapointe Opp’n at 4; NIB Opp’n at 2.)

At a motion hearing on September 15, 2017, this Court heard the parties’

arguments regarding the motion to stay and subsequently asked counsel for the

government Defendants to clarify whether the VA would continue to implement the

2017 Class Deviation during the pendency of the Federal Circuit appeal. The

government Defendants filed a notice on September 29, 2017, informing the Court that

“after considering the issues involved, the VA currently intends to continue applying

the March 2017 Class Deviation with respect to items on the AbilityOne List while the

PDS appeal is pending in the Federal Circuit.” (Defs.’ Notice at 2.) In response to this

notice, Plaintiffs filed supplemental oppositions to the motion to stay. (See

Alphapointe’s Reply to Defs.’ Notice, ECF No. 44; Response of NIB Pls. to Defs.’

Notice (“NIB Resp. to Defs.’ Notice”), ECF No. 45.)

II. MOTIONS TO STAY PROCEEDINGS PENDING LEGAL ACTION
ELSEWHERE

District courts have broad discretion to stay all proceedings in an action pending

the resolution of independent legal proceedings. See Landis v. N. Am. Co., 299 U.S.

248, 254 (1936). The authority to stay proceedings stems from “the power inherent in

every court to control the disposition of the causes on its docket with economy of time

and effort for itself, for counsel, and for litigants.” Air Line Pilots Ass’n v. Miller, 523

U.S. 866, 879 n.6 (1998) (internal quotation marks and citation omitted). In

considering a stay, courts must “weigh competing interests and maintain an even

balance between the court’s interests in judicial economy and any possible hardship to

9
the parties.” Belize Soc. Dev. Ltd. v. Gov’t of Belize, 668 F.3d 724, 732–33 (D.C. Cir.

2012) (quoting Landis, 299 U.S. at 254–55) (internal quotation marks omitted). In

other words, hardship to the parties and benefits to judicial economy are the key

interests to consider in evaluating a motion for a stay. See Hulley Enters. Ltd. v.

Russian Fed’n, 211 F. Supp. 3d 269, 276 (D.D.C. 2016).

Despite the broad discretion afforded to the courts in granting a stay, it is well

established that a stay pending the resolution of unrelated legal proceedings is an

extraordinary remedy. “Only in rare circumstances will a litigant in one cause be

compelled to stand aside while a litigant in another settles the rule of law that will

define the rights of both.” Landis, 299 U.S. at 255. Thus, the party seeking a stay

bears the burden of showing that the stay is needed and warranted. If there is “even a

fair possibility” that a stay would adversely affect another party, the movant for the stay

must demonstrate a “clear case of hardship or inequity in being required to go forward.”

Id. Moreover, and notably, “[a] stay is not a matter of right, even if irreparable injury

might otherwise result.” Indiana State Police Pension Trust v. Chrysler LLC, 129 S.

Ct. 2275, 2776 (2009).

III. ANALYSIS

The government Defendants and the Defendant-Intervenor essentially make three

arguments in support of the motion to stay proceedings: (1) that the first-filed rule

applies and requires this Court to stand down pending the Federal Circuit’s decision;

(2) that in the balance of the equities, there would be more hardship from continuing the

proceedings than from staying them; and (3) that judicial economy considerations

justify the stay. As explained below, in this Court’s view, none of these arguments is

10
persuasive, and at the end of the day, Defendants have failed to carry their burden of

demonstrating that a stay of proceedings is warranted.

A. The First-Filed Rule Does Not Apply

Defendants’ opening salvo is to invoke the ‘first-filed’ rule and to argue that the

overlap between the parties in this case and the PDS Consultants case means that the

instant action should be held in abeyance while PDS Consultants proceeds. (See Mot.

to Stay at 2 (maintaining that the instant situation “fits squarely within the ‘first-filed’

rule, making a stay of this second-filed case appropriate”).) But the first-filed rule has

a long, distinguished pedigree in this Circuit, and it is deemed to apply only when “two

cases between the same parties [and] on the same cause of action are commenced in

two different Federal courts[.]” Wash. Metro. Area Transit Auth. v. Ragonese, 617 F.2d

828, 830 (D.C. Cir. 1980) (emphasis added); see also UtahAmerican Energy, Inc. v.

Dep’t of Labor, 685 F.3d 1118, 1124 (D.C. Cir. 2012) (explaining that “[c]onsiderations

of comity and orderly administration of justice dictate that two courts of equal authority

should not hear the same case simultaneously” (internal quotation marks and citations

omitted)).

Thus, the first-filed rule is inapposite here, as the instant case generally involves

neither the same parties nor the same causes of action as PDS Consultants. In fact, the

party-related overlap upon which Defendants rely pertains only to two of the non-

government entities—Winston-Salem Industries for the Blind and PDS—while the other

three Plaintiffs in the instant case—National Industries for the Blind, Bosma Industries

for the Blind, and Alphapointe—are not parties in PDS Consultants. (See NIB Opp’n at

11
6; Alphapointe Opp’n at 10–11.) 7 It is also clear that the instant matter and PDS

Consultants arise under entirely different causes of action and require distinct remedies.

Specifically, PDS Consultants is a bid protest action brought under 28 U.S.C.

§ 1491(b)(1), and that case involves several specific VA contracts for eyewear;

therefore, the Court of Federal Claims ultimately ordered the VA “not to enter into any

new contracts for eyewear” before performing Rule of Two analysis. See PDS

Consultants, 132 Fed. Cl. at 129 (emphasis added). By contrast, the present

consolidated action is a direct challenge to the 2017 Class Deviation brought under the

APA (see NIB Compl. ¶¶ 38–43; Alphapointe Compl. ¶¶ 52–57), and as such, involves

requested remedies that transcend specific contracts, such as broad injunctive relief

prohibiting the application of the 2017 Class Deviation to all VA procurements (see

NIB Compl., Request for Relief, ¶¶ 1–2; Alphapointe Compl., Request for Relief, ¶¶ 1–

3). The NIB Plaintiffs’ complaint also alleges that the 2017 Class Deviation violates

the OFPPA and the FAR, in addition to the APA (see NIB Compl. ¶ 6; see also NIB

Opp’n at 6), none of which is claimed in the PDS Consultants case. And notably,

because the PDS Consultants appeal contains a threshold jurisdictional question (see

PDS Appeal Docketing Statement at 3), it is also entirely possible that the Federal

Circuit might not even have occasion to address the viability of the 2017 Class

Deviation under the JWOD and VBA, which is the only common legal issue between

the PDS Consultants case and the consolidated matters before this Court. (See infra

Part III.C.)

7
Defendants point to the fact that the National Industries for the Blind is an amicus in PDS Consultants
(see Mot. to Stay at 10), but submitting an amicus brief in a case is not equivalent to participating in
the case as a party, and thus, the amicus status of one of the pertinent entities has no bearing on the
Court’s analysis here.

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 This all means that the instant action and the PDS Consultants matter are far

from being substantially the “same case,” as is necessary for the first-filed rule to

apply. UtahAmerican Energy, 685 F.3d at 1124. Consequently, this Court easily

concludes that the ‘first-filed’ analysis that Defendants undertake in their motion to

stay briefing (see, e.g., Mot. to Stay at 8–12) finds no application here.

B. The Balance Of Hardships Weighs Heavily In Favor Of Proceeding
With The Instant Case

Nor can Defendants credibly claim that they will suffer more hardship if the

instant consolidated cases proceed during the pendency of the Federal Circuit appeal

than Plaintiffs will suffer if this Court issues a stay. See Landis, 299 U.S. at 255.

1. Plaintiffs Face More Than A Fair Possibility Of Harm From A Stay

First, it must be acknowledged that there is more than “a fair possibility” that

Plaintiffs would suffer harm if the case is stayed. Id. This is because the government

Defendants have notified the Court that the VA does not intend to suspend the

application of the 2017 Class Deviation during the pendency of the appeal before the

Federal Circuit (see Defs.’ Notice at 2), which means that any delay in this Court’s

resolution of Plaintiffs’ challenge risks prolonging the policy-related injuries that

Plaintiffs decry in their complaints (see, e.g., Alphapointe Compl. ¶ 8 (alleging that

Alphapointe “suffer[s] direct, substantial injury because the VA’s action will reduce, if

not eliminate, the VA’s orders for Alphapointe’s products”). What is more, it appears

that the government has sought additional time to brief the issues on appeal, thereby

extending the appellate process. (See Notice Regarding Request for Extension of Br.

Sched. in PDS Consultants, ECF No. 46.) As a result, if this Court stays the instant

proceedings for the duration of the (potentially extended) appeals process, Plaintiffs

13
will be subjected to the very procurement policy that they allege causes them harm—

i.e., the policy that they say causes them to “lose contracts the VA would otherwise be

obligated to award to them” (see NIB Opp’n at 2)—all the while.

It is also clear to the Court that the alleged harm to Plaintiffs is significant:

Plaintiffs aver that they hold VA contracts that will expire and are subject to renewal

within the likely timeframe for the resolution of the PDS Consultants appeal (see NIB

Resp. to Defs.’ Notice at 3; Alphapointe Opp’n at 8), and that these include contracts

for items that were added to the AbilityOne List after 2010, which are newly subject to

the Rule of Two under the 2017 Class Deviation (see NIB Resp. to Defs.’ Notice at 3).

Thus, even before this Court undertakes to consider Plaintiffs’ legal challenge,

Plaintiffs would face a potential loss of VA contracts, and corresponding harm to their

businesses, while waiting for the Federal Circuit appeal to run its course—likely for

more than a year. (See NIB Opp’n at 8; Alphapointe Opp’n at 8.)

To be sure, Plaintiffs have not shown that each and every one of the party

business organizations will necessarily suffer the feared loss of business during the

pendency of the Federal Circuit appeal, but the burden of demonstrating a hardship that

warrants staying properly filed legal proceedings is on the movant, see Landis, 299 U.S.

at 255, and when a stay is so requested, the relevant inquiry under Landis is whether

there is a fair possibility that the stay of proceedings “will work damage to some one

else[,]” id. (emphasis added). This Court has little doubt that the VA’s unabated

implementation of the procurement policy that Plaintiffs seek to challenge during the

pendency of a prolonged appeals process qualifies as damage, and in this Court’s view,

14
it creates more than a fair possibility that the proposed delay in the instant litigation

will harm Plaintiffs’ interests.

To be clear: it is the VA’s voluntary decision to continue to implement the policy

that Plaintiffs are challenging in the instant litigation that makes it next to impossible

for Defendants to maintain that there is no possibility that Plaintiffs will suffer harm

from a stay. (See Hr’g Tr. at 93:6-14 (counsel for the NIB Plaintiffs arguing that

Plaintiffs will suffer harm because it will likely be a year and a half until the Federal

Circuit comes to a decision, during which time there will be “additional contract

decisions that will come up involving post-2010 additions to the procurement list” that

will be subject to the 2017 Class Deviation).) And PDS’s answer—that there is no

harm to Plaintiffs because the VA will not, in fact, be implementing the 2017 Class

Deviation anytime soon due to the Court of Federal Claims’ decision in PDS

Consultants (see PDS Stay Br. at 6)—is plainly misguided. Not only has the VA now

expressly announced its intention to continue to implement the 2017 Class Deviation

for at least the duration of the pendency of the Federal Circuit appeal (see Defs.’ Notice

at 2), but the Court of Federal Claims has stayed its own judgment invalidating that

policy, see PDS Consultants, 2017 WL 3821803, at *1, which means that the VA has

every right to continue to implement the 2017 Class Deviation now. 8 What the VA

cannot do, consistent with equity principles, is to both opt to implement the policy that

8
Insofar as Plaintiffs seem to challenge the VA’s announced implementation in the context of the
instant action, their claims are ripe, and are certainly not “currently moot[,]” as PDS maintains. (PDS
Stay Br. at 7.) Mootness requires federal courts to refrain from deciding a matter “if events have so
transpired that the decision will neither presently affect the parties’ rights nor have a more-than-
speculative chance of affecting them in the future[,]” Clarke v. United States, 915 F.2d 699, 701 (D.C.
Cir. 1990) (en banc) (internal quotation marks and citation omitted), and PDS simply cannot show that
“there is no reasonable expectation that the alleged violation will recur[,]” Cnty. of Los Angeles v.
Davis, 440 U.S. 625, 631 (1979) (internal quotation marks, alteration, and citation omitted), where, as
here, the alleged violation is currently ongoing.

15
is allegedly harmful to Plaintiffs and simultaneously seek an indefinite delay of the

proceedings that Plaintiffs have brought to challenge the policy—at least without good

reason. (See Hr’g Tr. at 109:8 (the Court admonishing the government Defendants for

trying to “have it both ways” by refusing to agree to suspend the challenged policy at

the same time they seek an extended delay of the litigation pending appeal).) Put

another way, having created the conditions by which Plaintiffs now credibly claim that

there is a fair possibility that the stay will injure them, equity demands that Defendants

demonstrate clearly a justification for the potential harm to the Plaintiffs (presumably

rooted in Defendants’ own hardship), which, as explained below, Defendants have

failed to do.

2. Defendants Have Not Met Their Burden Of Showing A Clear Case
Of Hardship Or Inequity If The Instant Proceedings Continue

In their motion for a stay, the government Defendants do not even hint at any

true hardship that they would have the potential of facing in the absence of a stay of the

instant proceedings. (See Mot. to Stay at 1 (claiming, without elaboration, that the

consolidated proceedings should be stayed based on “considerations of consistency”);

see also Reply in Supp. of Defs.’ Mot. to Stay (“Defs.’ Reply”), ECF No. 31, at 2

(asserting that parallel litigation is inefficient).) The farthest that the government goes

in this regard is to state, as government counsel did at the motion hearing, that if the

consolidated cases proceed, the VA would be harmed by “the possibility of inconsistent

results[,]” which “would cause significant uncertainty and disruption” to the

procurement decisions that VA contracting officers make on a daily basis. (Hr’g Tr. at

83:8-9.) At least one other court in this district has rejected this line of argument; it

held that the “possibility of inconsistencies in rulings on the same issue”—without

16
more—is insufficient to constitute a clear case of hardship, Hisler v. Gallaudet Univ.,

344 F. Supp. 2d 29, 35 (D.D.C. 2004), and under the circumstances presented here, this

Court is inclined to agree.

For one thing, the government Defendants have not provided a cogent theory of

how the VA would face hardship on the basis of potentially inconsistent legal rulings on

the issue of its procurement policies, and this omission is especially glaring when there

is a realistic possibility that at least one of the hypothesized inconsistent judgments

would be stayed until the entire appellate review process runs its course. Cf. PDS

Consultants, 2017 WL 3821803, at *1. It is also seemingly incumbent upon the

government Defendants to explain why, in our federal system, inconsistent judgments

from courts in different jurisdictions should be considered inherently problematic.

There are no doubt countless examples of inconsistent legal rulings in the various

federal circuits that impact agency decision making; yet, somehow, the government

soldiers on. See, e.g., Ctr. for Regulatory Reasonableness v. EPA, 849 F.3d 453, 454

(D.C. Cir. 2017) (acknowledging that the Environmental Protection Agency might

employ policies with respect to publicly owned water treatment facilities in the Eighth

Circuit that are different than the agency’s policies in other circuits). And this Court is

unaware of any case in which the government has successfully persuaded a court in one

circuit to suspend pending litigation simply and solely because of the potential of an

inconsistent ruling rendered in the context of a similar case in another jurisdiction;

indeed, with certiorari at stake, this Court imagines that the government might actually

relish the opportunity that such inconsistent judgments can provide. See, e.g., Pet. for

Writ of Cert., U.S. Forest Serv. v. Cottonwood Envtl. Law Ctr., No. 15-1387, 2016 WL

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2866086, at *17–18 (U.S. May 13, 2016); Pet. for Writ of Cert., U.S. Army Corps of

Eng’rs v. Hawkes Co., No. 15-290, 2015 WL 5265284, at *12–13 (U.S. Sept. 8, 2015).

Thus, the government Defendants have not made a clear showing that the possibility of

inconsistent judgments is a hardship, nor have they not articulated any other hardship or

inequity to them if this case proceeds. Thus, the balance of the harms clearly weighs in

Plaintiffs’ favor vis-à-vis the government.

For its part, PDS asserts that it will face significant hardship if the consolidated

cases in this Court continue, because PDS is a small business that will would be forced

to “spend time and resources litigating the same issues in two forums unnecessarily.”

(PDS Stay Br. at 5.) But if PDS is burdened by the instant litigation, it has only itself

to blame. That is, PDS is involved in the instant consolidated actions only because it

sought to intervene in the matters before this Court (see PDS Mot. to Intervene, ECF

No. 7)—i.e., PDS voluntarily jumped into the fray that it now says should be halted on

the grounds that its participation is too burdensome to maintain. Needless to say, this

argument is patently insubstantial. Moreover, and in any event, there is no question

that the purported hardship to PDS in bearing additional litigation costs pales in

comparison to the hardship Plaintiffs might suffer if they lose VA contracts for the next

year or more while the instant consolidated actions are put on hold.

Thus, the Court finds that the VA’s plan to continue applying the 2017 Class

Deviation through the pendency of the Federal Circuit appeal creates a fair probability

that Plaintiffs will be harmed by the delay in litigating their claims in this Court, and no

Defendant has credibly claimed any cognizable harm to itself if the instant consolidated

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action moves forward. Therefore, the balance of the equities weighs heavily in favor of

permitting the consolidated cases to proceed.

C. Considerations of Judicial Economy Do Not Require A Stay

Finally, this Court declines to accept Defendants’ most potent contention in

support of the motion to stay, which is their insistence that a stay of the instant

proceedings would conserve judicial resources. (See Mot. to Stay at 8–11; see also

PDS Stay Br. at 3–5, 7–9.) There is no question that “parallel litigation of factually

related cases in separate fora is inefficient” and should be avoided. Handy v. Shaw,

Bransford, Veilleux & Roth, 325 F.3d 346, 349 (D.C. Cir. 2003). But it is not at all

clear that there would be any gains in judicial economy under the circumstances

presented here, for two reasons.

First, there is considerable uncertainty regarding whether or not the Federal

Circuit will actually reach the legal issue that is common to these cases. See Dellinger

v. Mitchell, 442 F.2d 782, 787 (D.C. Cir. 1971) (holding that a court can proceed

without waiting for another court of coordinate jurisdiction when it “cannot be certain

that the other [court] would determine the issue”). This is because, as previously

mentioned, the PDS Consultants appeal raises a threshold question regarding the

jurisdiction of the Court of Federal Claims (see PDS Appeal Docketing Statement at 3

(indicating that the first issue noticed for appeal is “[w]hether [the] Court exceeded its

jurisdiction by considering a bid protest that did not challenge a new contract award or

new solicitation, and by reviewing the validity of underlying statutes and regulations”)),

and, thus, the Federal Circuit might very well dispose of the case before it without

reaching the merits of the legal claims. If that is the result, then this case would begin

again on square one after having been held in abeyance for a year or more for the

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conclusion of that appeal, and no efficiency gains would have been realized from

having required Plaintiffs to “stand aside[.]” Landis, 299 U.S. at 255.

Second, it is also the case that, even if the Federal Circuit undertakes to reach

the merits of the case before it, the appeal that is pending is unlikely to resolve all of

the issues that Plaintiffs raise in the instant consolidated matters, primarily because

PDS Consultants involves an entirely different cause of action. Although the substance

may be similar, the instant cases involve a cause of action that challenges agency

decision making in a manner that is distinct from the bid protest action that is pending

in the Federal Circuit. (See supra Part III.A.) Likewise, Plaintiffs’ claims here that the

VA employed defective procedures when it adopted the 2017 Class Deviation (see

Alphapointe Compl. ¶ 6; NIB Compl. ¶ 6) would not be addressed in any Federal

Circuit opinion, and require a wholly separate inquiry that falls on this Court to

conduct. Under these circumstances, Defendants have failed to make a clear showing

that a stay would necessarily result in any efficiency gains at all, much less the

significant savings that would warrant the imposition of such a substantial delay.

IV. ORDER

As much as this Court would love to have the benefit of the Federal Circuit’s

decision prior to its own consideration of the thorny legal issue presented in the instant

matters, this Court takes seriously its obligation to “maintain an even balance between

the court’s interests in judicial economy and any possible hardship to the parties[.]”

Belize Soc. Dev. Ltd., 668 F.3d at 732 (internal quotation marks and citation omitted).

To this end, in order to succeed in its request for a delay of proceedings, Defendants

must make a clear showing that the stay is warranted, Landis, 299 U.S. at 255, and this

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Court finds that Defendants have fallen far short of demonstrating that the current

interest in judicial economy (such as it is) and the hardship to Defendants from

proceeding with this consolidated action (whatever it may be) outweighs the harm that a

stay of proceedings inflicts upon Plaintiffs (who will purportedly be subjected to the

policy they seek to challenge each day that the various cases proceed). Accordingly, it

is hereby

ORDERED that Defendants’ motion to stay the instant proceedings pending the

resolution of the PDS Consultant appeal (ECF No. 20) is DENIED. It is

FURTHER ORDERED that, because time is of the essence with respect to

resolving the matters at hand, the stay of Defendants’ obligation to answer or otherwise

respond to the complaints in this case (see Minute Order of July 19, 2017) is LIFTED,

and Defendants are instructed to answer or otherwise respond on or before November

23, 2017.

DATE: November 7, 2017 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge

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