Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 1 of 10

ORIGINAL
IN THE UNITED STATES COURT OF FEDERAL CLAIMS

FILED
)
DNC PARKS & RESORTSATYOSEMITE, INC., )
)
Plaintiff,
)
)
)
)
)
THE LINITED STATES OFAMERICA.
)
)
Defendant
)
)

sEP

l7

20t5

U,S. COUBT OF
FEDERAL CLAIMS

No.

Jud! e

-1034

COMPLAINT
NATURE OFTHE CASE

1.

Plaintiff DNC Parks & Resorts at Yosemite, Inc. ("DNCY") brings this action

pursuant to 28 U.S.C. $1a91(a)(1) for damages resulting from Defendant's breach ofan express
contract under which DNCY provides concession services within Yosemite National Park

("Yosemite") and for damages resulting from Defendant's breach ofan implied-in-fact contract

with DNCY to conduct

a

fair competition for the new concession contract at Yosemite.
PARTIES

2.

Plaintiff DNCY is

a subsidiary

of Delaware North Parks & Resorts, Inc., one of

the largest hospitality management companies serving national and state parks in the United
States. Prior to May 9,2003, DNCY was named Yosemite Concession Services Corporation.

3.

Defendant is the United States of America ("the Govemment"). The contract at

issue was executed by the Director of the National Park Service
Secretary

CNPS) on behalf of

the

ofthe Department ofthe Interior ("Secretary').

JURISDICTIONAND VENUE

4.

Jurisdiction and venue in this Court are proper under 28 U.S.C. $la9l(a)(1).

I

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 2 of 10

FACTUAL BACKGROUND

5.

On or about September 29,1993, the Secretary, acting though the Director

of

NPS, and DNCY entered into Contract No. CC-YOSE004-93 (the "Contract"), a concession
contract "to provide accommodations, facilities and services for the public" within Yosemite.

6.

Under the Contract, DNCY operates 1,542 guest rooms, 25 food and beverage

units, 19 retail locations, a wide range ofguest activities including the Wawona golfcourse, the
Badger Pass ski area, horseback riding, and multiple interpretive programs, along with the
support services needed to keep these operations running, including office and maintenance staff,
warehouses, transportation, and employee housing.

7.

The Contract had an initial l5-year term commencing October

l,

1993 that was to

expire on September 30, 2008. The term was extended on several occasions and the Contract is

currently set to expire on February 29,2016.

A.

As a condition of being granted the Contract, DNCY purchased all
Company's assets used or held for use in Yosemite.

8.
and after

ofCurry

For more than 100 years prior to 1993, visitor services at Yosemite (both before

it was designated a U.S. National Park) had been provided by a private company, the

Yosemite Park & Curry Company ("Curry Company").

9.

Curry Company built significant improvements in Yosemite with its own capital,

including The Ahwahnee, Yosemite Lodge, and Cuny Village. Curry Company held a
"possessory interest" in the structures it built, consisting

ofall incidents of ownership, except

legal title, which was vested in the Govemment.

10.

Curry Company also developed and used registered and unregistered trademarks,

servicemarks and logos in its operations, including the iconic Half-Dome logo design, "The

Awhanee" hotel name and logo design, "Bracebridge Dinner," and "Go Climb A Rock."

2

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 3 of 10

I

l.

Curry Company's final concession contract with NPS provided that at the end of

its term, if Curry Company's concession operations were to be thereafter conducted by a
successor,

it was required sell to the successor its possessory interest in its improvements and

"all other property" Curry Company "used or held for

use in connection

with its Yosemite

operations." The contract further provided that the Secretary would require any successor
concessioner to purchase Curry Company's possessory interest and "other property," and pay

Curry Company "the fair value thereof."

12.

As Curry Company's contract approached expiration, Curry Company

relinquished all of its possessory interest in concessioner improvements, leaving only its "other

properly" to be purchased by a successor concessioner.

13.

To fulfill the Secretary's obligation to require Curry Company's successor to

purchase the "other property," the Statement of Requirements issued by NPS

in 1992 for the

Contract required, as a condition ofthe award ofthe Contract, that the successful bidder acquire

Curry Company's remaining assets for a non-negotiable, pre-determined price of approximately
$61.5

million (roughly $115 million in 2015 dotlars).

14.

After being selected for award of the Contract, DNCY met this requirement (by

accepting the assignment of a merger agreement between Curry Company and the National Park
Foundation) and purchased all of the "other propefty" Curry Company used or held for use in its
operations at Yosemite.

15.

Included in the "other property" DNCY was required to purchase from Curry

Company were Curry Company's intangible assets such as registered and unregistered
trademarks, servicemarks, and logos, and Curry Company's customer mailing list.

3

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 4 of 10

B

The Contract obligates NPS to require a successor concessioner
to purchase all of DNCY's property used or held for use in Yosemite.

16.

As with Curry Company's contract, DNCY's Contract, which was drafted by

NPS, expressly obligates NPS to require any successor concessioner at Yosemite to purchase
property from DNCY. The Contract provides

(i) [DNCY will] sell and transfer to the successor designated by the
Secretary its POSSESSORY INTEREST in CONCESSIONER and
GOVERNMENT IMPROVEMENTS, if any, as defined under the
contract, and all other
of DN
r
use ln
connection with such operations ; and

(ii) the Secretary will require such successor, as a condition to the granting
of a contract to operate, to purchase from [DNCY] such POSSESSORY
INTEREST, if any, and such other prope(y, and to pay [DNCY] the fair
value thereof.
Contract, Section 13(b)(1) (capitalization in original; underlining added) (the underlined
language is hereinafter referred to as the "Other Property").

17.

The Contract requires NPS to make the successor's purchase ofand payment for

DNCY's Other Property "a condition to the granting of'the next contract to operate concessions
in Yosemite.

18.

The Contract also requires NPS to require a successor concessioner "to pay the

fair value" of DNCY's Other Property.

19.

DNCY's Other Property includes all of its nurnerous operational assets, including

intangible property. DNCY has maintained the registrations and fully exploited the trademarks,
servicemarks and logos NPS required DNCY to purchase from Curry Company. DNCY has also
created, used and registered additional marks. Additionally, DNCY has cultivated a customer
database

with 75 different informational fields for more than 720,000 customers and has

developed a portfolio of Yosemite-related internet assets, including l7 domain names, websites,
and multiple social media accounts.

4

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 5 of 10

C.

NPS issued a Prospectus for a new Yosemite concession contract stating that NPS
would require any successor concessioner to purchase DNCY's intangible property.

20.

On July 9, 2014, NPS issued a prospectus (as amended by amendments 1-13

thereto) (he "Prospectus") for Contract No. CC-YOSE004-16, a new concession contract at
Yosemite (the "New Contract"), to commence upon the expiration of the Contract.

21.

The Prospectus informed the potential offerors that under the Contract any

successor concessioner must purchase DNCY's "other property used or held for use in

connection with the operation" and stated that this "includes personal property such as fumiture,
trade fixtures, equipment, and vehicles."

22.

Before, during and after the solicitation process, DNCY repeatedly sought

assurances from NPS that

it would comply with its obligation under the Contract to require

a

successor concessioner, as a condition to being granted the New Contract, to purchase and pay

for DNCY's Other Property at fair value.

23.

In an amendment to the Prospectus, NPS made clear that the Other Property a

successor concessioner would be required to purchase from DNCY also includes DNCY's

intangible property, including its "intellectual property, customer database, and intemet related

intangibles."

24.

The New Contract to be awarded pursuant to the Prospectus requires that the

concessioner transfer intellectual property relating to Yosemite to NPS at the expiration or

termination of the contract.

25.

On June 16,2015, NPS announced that it had selected Yosemite Hospitality, LLC

for award of the new concession contract at Yosemite. Upon information and belief, Yosemite
Hospitality, LLC is a wholly-owned subsidiary of Aramark that was created for the sole purpose
of performing the New Contract if its offer was selected. In their communications leading up to

5

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 6 of 10

this lawsuit, the parties have often referred to Yosemite Hospitality, LLC as "Aramark." To
avoid confusion, therefore, Yosemite Hospitality, LLC is referred to hereafter in this Complaint
as

"Aramark."

D

NPS repudiated its contractual obligation to require Aramark to purchase all of

DNCY's Other Property.

26.

NPS granted Aramark the New Contract without requiring Aramark to purchase

and pay for all of

DNCY's Other Property at fair value. NPS granted Aramark the New Contract

despite the absence

ofany purchase agreement with DNCY to buy the Other Property for fair

value. Instead, after selecting Aramark

as the successor concessioner, NPS announced

unequivocally that it will not comply with its obligation under the Contract to require Aramark,
as a

condition to the granting ofa contract to operate, to purchase and pay fair value for all of

DNCY's Other Property.

27.

First, NPS unequivocally declared that it will not require Aramark to purchase a

category of DNCY's Other Property that the parties have referred to as "fixed capitalized assets."

This category of Other Property consists of capital improvements that DNCY made at its own
expense, all of which were pre-approved by NPS.

28.

Second, NPS unequivocally stated that, contrary to the terms

ofthe Prospectus, it

will no longer require Aramark to purchase any of DNCY's intangible property.

29.

DNCY is and has been prepared to sell all ofits Other Property, including fixed

capitalized assets and intangible property, to Aramark for fair value pursuant to the terms ofthe
Contract, just as DNCY was required to buy all of Curry Company's "other property."

30.

DNCY has been and will be damaged by NPS's repudiation of its obligation to

require Aramark to purchase all of DNCY's Other Property for fair value, in breach of the

Contract. DNCY's damages include the dollar amounts that DNCY would have received from

6

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 7 of 10

Aramark in return for the fixed capitalized assets and intangible property had NPS complied with
its obligation to require Aramark to purchase that property for fair value as a condition to
granting Aramark the successor concession contract at Yosemite. DNCY has also incurred costs
that would have been unnecessary in the absence of NPS's breach, such as costs arising from

DNCY's efforts to persuade Aramark to purchase and pay fair value for all of DNCY's Other
Property.
E.

DNCY was prejudiced by NPS's retraction of a major Prospectus requirement
after NPS had selected Aramark for award.

31.

DNCY submitted

a

bid for the New Contract. DNCY incuned substantial costs

preparing its bid.

32.

In preparing the bid, DNCY relied upon the Prospectus, including the requirement

that a new concessioner purchase DNCY's intangible property. In particular, DNCY recognized
that, if another offeror was awarded the New Contract, DNCY was entitled to be paid the fair
value of its intangible property. If DNCY was awarded the New Contract, however, DNCY

would forego this opportunity to sell its intangible property and would be required to transfer its
Yosemite-related intellectual property to NPS for no additional compensation.

33.

DNCY's bid accounted for this opportunity cost by including it

as a cost

of

performing the New Contract. If the Prospectus had not stated that the new concessioner would
be required to buy

DNCY's intangible property, DNCY would not have included this

opportunity cost in its financial analysis and would have submitted a bid that would have been
materially more attractive to NPS and could have been selected for award.

COUNT

34.

I

DNCY incorporates by reference paragraphs I through 33 above as

forth herein.

7

iffully

set

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 8 of 10

35.

Defendant's failure to require Aramark to purchase and pay fair value for the

property DNCY uses or holds for use in connection with its Yosemite operations, as a condition

to granting Aramark the New Contract, is a breach ofthe Contract.

36.

Defendant's unequivocal repudiation ofits contractual obligation to require

Aramark to purchase and pay for the Other Property as a condition to being granted the New
Contract is a breach of the Contract.

37.
damages and

Defendant's breaches ofthe Contract have caused DNCY to suffer money

will continue to cause additional damages to DNCY, in an amount to be proved

at

trial.
COUNT

38.

II

DNCY incorporates by reference paragraphs I through 37 above as iffully set

fonh herein.

39.

By issuing the Prospectus for the New Contract and inducing DNCY to incur

substantial costs in the preparation ofa conforming bid, NPS formed an implied-in-fact contract

with DNCY to conduct a fair and honest competition for the New Contract that was not arbitrary,
capricious, an abuse ofdiscretion or in violation of law.

40.

The Prospectus was issued under the authority ofthe regulations set forth at 36

C.F.R. $$ 51.1-51.104, which are incorporated by reference into the Prospectus and control in
the event

ofany inconsistency between the terms ofthe Prospectus and the regulations.

Specifically, 36 C.F.R. $ 51.4 requires NPS to award all concession contracts through a public
solicitation process, which must describe the terms and conditions ofthe concession contract in a
prospectus. Additionally, 36 C.F.R. $ 5l .19 requires NPS to award a concession contract that
does not materially amend or deviate from the terms

8

ofthe prospectus.

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 9 of 10

41.

NPS breached its implied-in-fact contract with DNCY by materially deviating

from the terms of the Prospectus after selecting Aramark for the award. NPS's actions were
arbitrary, capricious, an abuse of discretion and not in accordance with law. Specifically, NPS's
post-award announcement that Aramark would not be required to purchase DNCY's intellectual
and other intangible property was contrary to the terms of the Prospectus. Offerors such as

DNCY could not reasonably anticipate that the requirement to purchase DNCY's intellectual and
other intangible property would be eliminated post-award. The New Contract between NPS and

Aramark therefore violates 36 C.F.R. $$ 5 I .4 and 5 I .19, because its terms are materially
different from those of the Prospectus under which the offerors competed.

42.

DNCY was prejudiced by NPS's actions. Had the Prospectus accurately stated

NPS's intent not to require the new concessioner to buy DNCY's intellectual and other
intangible property, the submitted bids would have been materially different and DNCY would
have had a substantial chance ofreceiving the award.

43.

NPS's breach of the implied-in-fact contract caused damages to DNCY in the

form of bid and proposal costs.

44.

DNCY prays for judgment in its favor against the Govemment for damages in an

amount to be determined at trial, together with costs, reasonable attorneys' fees and other relief
as the Court deems

just.

9

 Case 1:15-cv-01034-PEC Document 1 Filed 09/17/15 Page 10 of 10

Dated: September 17, 201

5

Respectfully

P. Mclish Attomey of Record)
tmclish@akingump.com
Joseph W Whitehead (Of Counsel)
j whithehead@akingump.com
Karol A. Kepchar (Of Counsel)
kkepchar@akingump.com
Akin Gump Strauss Hauer & Feld, LLP
133 3 New Hampshire Avenue, N.W.
Washington, D.C. 20036- I 564
(202) 887 -4324 $et)
(202) 887-4288 (Fax)

Jennifer A. Shah (Of Counsel)
j shah@phillipsl)'tle.com
Nicolas J. Rotsko (Of Counsel)
nrotsko@phillipsll'tle.com

PHILLIPS LYTLE LLP
125 Main Street
Buffalo, NY 14203-2887
(7 16) 847 -s467 (Tel)
(716) 852-6100 (Fax)
Attomeys for DNC Parks & Resorts at Yosemite,
Inc.

l0