Schindler Elevator Corp. v. Wash. Metro. Area Transit Auth.

16 F.4th 294

SCHINDLER ELEVATOR CORPORATION, a New Jersey Corporation, Appellant

v.WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, an Interstate Agency Created by Compact and Kone Inc., Appellees

No. 21-7008

United States Court of Appeals, District of Columbia Circuit.

Argued September 23, 2021

Decided October 22, 2021

H. Christopher Bartolomucci argued the cause for appellant. With him on the briefs was Lawrence M. Prosen.

Attison L. Barnes, III argued the cause for appellee Washington Metropolitan Area Transit Authority. With him on the brief were Stephen J. Obermeier and Jeremy J. Broggi.

Daniel W. Wolff and Lyndsay A. Gorton were on the brief for appellee Kone Inc.

Before: Henderson and Jackson, Circuit Judges, and Sentelle, Senior Circuit Judge.

Karen LeCraft Henderson, Circuit Judge:

In response to a Request for Proposal (RFP) from the Washington Metropolitan Area Transit Authority (WMATA), Schindler Elevator Corporation submitted a bid to replace the escalators throughout WMATA's Metro Rail System stations. WMATA rejected the proposal, over Schindler's protests, and awarded the contract to another company. Schindler sued, alleging that WMATA arbitrarily eliminated it from consideration even though it complied with the RFP's requirements and offered a better value than that proposed by the awardee. The district court dismissed sua sponte Schindler's complaint for lack of subject matter jurisdiction on the ground that WMATA, an interstate compact entity, had not waived its sovereign immunity. We agree and affirm the district court's dismissal of Schindler's complaint because neither the interstate compact creating WMATA, the Authority's procurement documents nor the Administrative Procedure Act (APA) waives WMATA's sovereign immunity for challenges to procurement decisions like Schindler's.

I.

Created in 1966 through an interstate compact signed by Maryland, Virginia and the District of Columbia and approved by the Congress, WMATA operates a mass transit system for the District of Columbia and surrounding Virginia and Maryland suburbs. Washington Metropolitan Area Transit Authority Compact, Pub. L. No. 89–774, 80 Stat. 1324 (1966) (WMATA Compact); see also U.S. CONST. art. I, § 10, cl. 3 ("No State shall, without the Consent of Congress, ... enter into any Agreement or Compact with another State."); MD. CODE TRANSP. § 10-204 (codifying WMATA Compact); VA. CODE ANN. § 33.2-3100 (same) ; D.C. CODE ANN. § 9-1107.01 (same). Schindler is a global manufacturer and service provider of elevators, escalators and moving walkways.¹ WMATA and Schindler have enjoyed a longstanding business relationship and have worked together on numerous escalator maintenance and improvement projects at stations throughout WMATA's Metro Rail System.

On January 30, 2020, WMATA issued its RFP soliciting bids to replace aging escalators in the Metro Rail System. The solicitation sought proposals to remove the existing escalators and manufacture and install new ones along with their associated equipment and components. The RFP also described the required technical specifications for each part of the removal and installation project. It explained that WMATA intended to evaluate proposals based on technical merit and price according to its Procurement Procedures Manual (PPM) and then award the contract to the bidder that offered the best value.

Schindler submitted its proposal to WMATA on May 6, 2020, to which WMATA responded shortly thereafter with a request for clarification seeking further explanation and documentation addressing various aspects of Schindler's proposal. Schindler replied a few days later, supplying the additional requested information and answering WMATA's questions. Later that summer, however, WMATA informed Schindler that its proposal did not satisfy the RFP's requirements and that it had been eliminated from consideration for the award.

Following its disqualification, Schindler requested a debriefing and filed an initial protest regarding WMATA's decision. WMATA explained to Schindler during the debriefing call that its proposal was unacceptable because it failed to meet certain criteria required by the RFP. The deficiencies included (1) proposing work on four locations where more than one escalator would be replaced simultaneously, (2) recommending the modification of WMATA's pit size requirements to allow for the installation of certain mechanical features and (3) failing to demonstrate that its key personnel met the required qualifications. Schindler pushed back and responded to each of the purported deficiencies but WMATA kept to its previous determination that Schindler's proposal did not comply with the RFP.

Undeterred, Schindler filed a supplemental protest. In both its initial and supplemental protest filings, Schindler detailed the alleged errors WMATA made in reaching its determination to reject the proposal and Schindler's own efforts to respond to WMATA's concerns and satisfy the requirements. But WMATA never budged. On October 2, 2020, WMATA issued its Final Decision denying both Schindler's initial protest and supplemental protest. A week later, WMATA awarded the contract to Kone, Inc., even though, according to Schindler, Kone's proposal neither satisfies the RFP criteria nor provides the best value for the project.

Schindler then sued WMATA in federal district court, alleging that WMATA improperly disqualified Schindler from consideration for the contract and awarded the grant to Kone. It sought a declaratory judgment, an order directing specific performance by WMATA to cancel the Kone award and either award the contract to Schindler or reevaluate its proposal and other injunctive relief.

The district court denied Schindler's motion for a preliminary injunction and sua sponte dismissed Schindler's complaint for lack of jurisdiction. Schindler Elevator Corp. v. WMATA , 514 F. Supp. 3d 197, 201 (D.D.C. 2020). It recognized that WMATA is protected by sovereign immunity as an interstate compact entity and held that neither the WMATA Compact nor the APA waives WMATA's sovereign immunity for Schindler's procurement challenge. Id. at 203, 212. More specifically, it found that the WMATA Compact's limited waiver of sovereign immunity does not extend to Schindler's procurement challenge, that WMATA's procurement documents do not expand the waiver and that the APA does not waive immunity because WMATA is not a federal agency thereunder. Id. at 206–12. Schindler appealed.

II.

Although the district court's jurisdiction vel non is ultimately the subject of this appeal, "a federal court always has jurisdiction to determine its own jurisdiction." Brownback v. King , ––– U.S. ––––, 141 S. Ct. 740, 750, 209 L.Ed.2d 33 (2021) (quoting United States v. Ruiz , 536 U.S. 622, 628, 122 S.Ct. 2450, 153 L.Ed.2d 586 (2002) ); see also FDIC v. Meyer , 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) ("Sovereign immunity is jurisdictional in nature."). We have appellate jurisdiction pursuant to 28 U.S.C. § 1291, as Schindler timely appealed from a final order of the district court. We review de novo the district court's dismissal of Schindler's complaint for lack of subject matter jurisdiction. KiSKA Constr. Corp. v. WMATA , 321 F.3d 1151, 1157 (D.C. Cir. 2003).

III.

WMATA is the creation of an interstate compact entered into by Maryland, Virginia and the District of Columbia. Id. at 1158. We have repeatedly recognized that it is accordingly vested with the sovereign immunities, including state sovereign immunity, of the Signatories to the WMATA Compact. See, e.g. , id. ; Watters v. WMATA , 295 F.3d 36, 39 (D.C. Cir. 2002). And "unless WMATA's sovereign immunity has been waived, the district court lacks jurisdiction to enter a judgment against" it. Watters , 295 F.3d at 39–40.

Schindler maintains there are several avenues by which WMATA's sovereign immunity could be waived here: the WMATA Compact, WMATA's procurement documents, including the PPM, the RFP and the Final Decision denying Schindler's protests, and the APA. We examine each in turn, concluding that WMATA did not waive sovereign immunity for the type of procurement challenge at issue.

A.

"In deciding whether a State has waived its constitutional protection under the Eleventh Amendment, we will find waiver only where stated by the most express language or by such overwhelming implications from the [text] as [will] leave no room for any other reasonable construction." Morris v. WMATA , 781 F.2d 218, 221 (D.C. Cir. 1986) (second alteration in original) (internal quotation marks omitted) (quoting Edelman v. Jordan , 415 U.S. 651, 673, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) ). Maryland, Virginia and the District of Columbia undoubtedly waived WMATA's sovereign immunity in the Compact—but in only a narrow set of circumstances which do not include Schindler's procurement challenge.

Section 80 of the WMATA Compact provides that WMATA "shall be liable for its contracts and for its torts ... committed in the conduct of any proprietary function, ... but shall not be liable for any torts occurring in the performance of a governmental function." 80 Stat. 1350. We have repeatedly recognized that this waiver of WMATA's sovereign immunity is "limited." Banneker Ventures, LLC v. Graham , 798 F.3d 1119, 1138 (D.C. Cir. 2015) ; KiSKA Constr. Corp. , 321 F.3d at 1158. Moreover, we have emphasized that this limited waiver is exclusively "contained in" Section 80. Morris , 781 F.2d at 221. And we are not alone, as our sister circuit that reviews claims brought against WMATA has also recognized. See, e.g. , Lizzi v. Alexander , 255 F.3d 128, 133 (4th Cir. 2001) (scope of WMATA's consent to be sued is "specifically and expressly delineate[d]" in section 80), overruled in part on other grounds by Nev. Dep't of Hum. Res. v. Hibbs , 538 U.S. 721, 123 S.Ct. 1972, 155 L.Ed.2d 953 (2003). Schindler acknowledges that its challenge sounds in neither contract nor tort. Therefore, section 80's limited waiver...