Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

TODD CONSTRUCTION, L.P. f/k/a TODD CONSTRUCTION CO., INC., Plaintiff, v. THE UNITED STATES, Defendant.

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No. 07-324C (Judge Edward J. Damich)

DEFENDANT'S MOTION TO DISMISS Defendant, the United States, respectfully requests this Court to dismiss the complaint of plaintiff Todd Construction, L.P. for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Rules of this Court ("RCFC"), or, in the alternative, for failure to state a claim pursuant to Rule 12(b)(6). QUESTION PRESENTED 1. Whether this Court lacks subject matter jurisdiction to adjudicate Todd

Construction's claims regarding its performance evaluations, which are not cognizable under the Tucker Act, 28 U.S.C. § 1491(a). 2. granted. STATEMENT OF FACTS1 According to its complaint, Todd Construction received two task orders from the United States for projects on the Seymour Johnson Air Force Base, located in North Carolina. Compl. ¶ Whether Todd Construction has failed to state a claim upon which relief can be

For the sole purpose of this motion, we will treat the allegations in Todd Construction's complaint as true.

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4. According to Todd Construction, the Army Corps of Engineers ("Corps") evaluated Todd Construction's performance upon these projects as "unsatisfactory" in the proposed final evaluations issued on March 26, 2006, in connection with these projects, and sent the evaluations to Todd Construction for comment. Compl. ¶ 5. Todd Construction alleges that it timely submitted comments regarding these proposed final evaluations. Id. It further alleges that on July 23, 2006, the Corps issued final evaluations upon the projects, which Todd Construction timely appealed. Compl. ¶ 6. According to Todd Construction, the Corps issued a final decision rejecting Todd Construction's appeal and issuing the final evaluations. Compl. ¶ 7. The Corps then allegedly posted these evaluations in the Construction Contractor Appraisal Support System ("CCASS"). Compl. ¶ 7. Todd Construction alleges that the final decision of the Corps should be found unlawful and set aside because the actions of the Corps in connection with the performance evaluations were: (1) arbitrary, capricious, an abuse of discretion, and not in accordance with law; (2) outside of the statutory and regulatory authority of the Corps; (3) in violation of procedures required by law; and (4) unsupported by substantial evidence and/or unwarranted by the facts. Compl. ¶ 9. In its complaint, Todd Construction requests that this Court determine that the final decision of the Corps is unlawful and should be set aside. Compl. 2. Todd Construction also seeks an order from this Court directing the Corps to remove the final performance evaluations from the CCASS. Id. Finally, Todd Construction seeks any other relief as the Court deems proper, including interest, costs, and attorney fees. Compl. 3.

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ARGUMENT I. Applicable Legal Standard It is axiomatic that if this Court lacks subject matter jurisdiction over the claims in the complaint, the complaint must be dismissed. RCFC 12(b)(1). In determining whether it possesses subject matter jurisdiction, this Court is to treat the allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995). The jurisdiction of this Court is limited; Congress has only granted this Court jurisdiction to entertain claims where the United States has waived its sovereign immunity from suit. United States v. Testan, 424 U.S. 392, 399 (1972); Booth v. United States, 990 F.2d 617, 619 (Fed. Cir. 1993). The Tucker Act, 28 U.S.C. § 1491, governs the United States' waiver of sovereign immunity from suit in this Court: This statute confers jurisdiction on the Court of Federal Claims, and a corresponding waiver of the government's sovereign immunity from suit, when the constitutional provision, statute, or regulation in question expressly creates a substantive right enforceable against the federal government for money damages. LeBlanc v. United States, 50 F.3d 1025, 1028 (Fed. Cir. 1995). Because the Tucker Act is merely a jurisdictional statute, however, it creates no substantive right to relief in suits against the United States. Accordingly, a plaintiff in this Court must identify a contract or moneymandating constitutional provision, statute, or regulation that entitles it to relief. Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir. 1997); Sanders v. United States, 34 Fed. Cl. 75, 78 (1995).

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The plaintiff bears the burden of showing that the Court possesses jurisdiction to consider its claims. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189 (1936); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). Furthermore, the plaintiff must carry this burden by a preponderance of the evidence. Reynolds, 846 F.2d at 748. In addition, to state a claim for relief in this Court, a plaintiff must set forth factual allegations in support of its claim, rather than merely setting forth labels and conclusions, or merely reciting the elements of a cause of action. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-69 (May 21, 2007) (limiting the language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief"). As the Supreme Court recently held, "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 1965. II. This Court Lacks Jurisdiction To Entertain Todd Construction's Complaint Todd Construction has attempted to state a claim under the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 701, et seq, which permits review of agency action seeking equitable relief. Compl. ¶ 3; see Martinez v. United States, 333 F.3d at 1313 (discussing nonstatutory review actions under the APA by plaintiffs seeking an upgrade in discharge classification without monetary relief). Todd Construction cites 5 U.S.C. §§ 701, et seq, as a basis for jurisdiction, and recites the APA standard for unlawful agency action. As such, its complaint falls well outside the jurisdiction of this Court because this Court lacks jurisdiction over suits

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under the APA. See Martinez, 333 F.3d at 1313 (stating that the Court of Federal Claims lacks APA jurisdiction); Murphy v. United States, 993 F.2d 871, 874 (Fed. Cir. 1993); McNabb v. United States, 54 Fed. Cl. 759, 767 (2002) (explaining "APA reviews are conducted in federal district court rather than the [United States] Court of Federal Claims, since the APA addresses `relief other than money damages.'"). Accordingly, Todd Construction's complaint must be dismissed. III. To The Extent That This Court Treats Todd Construction's Complaint As One Arising Under The Contract Disputes Act, This Court Still Does Not Possess Jurisdiction To Entertain The Complaint Should this Court decide to treat Todd Construction's complaint as one arising under the Contract Disputes Act, this Court still lacks jurisdiction.2 This Court is only permitted to grant nonmonetary relief in CDA cases under limited circumstances, namely where that nonmonetary relief involves interpretation of the contract terms or where the nonmonetary relief being sought is essentially a "substitute" for monetary relief. Because neither of those circumstances exist here, this Court lacks jurisdiction to grant Todd Construction either the declaratory or the injunctive relief it seeks.3

Todd Construction does allege that it received a "final decision" from the Corps regarding the issue of the performance evaluations. Compl. ¶ 7. It appears that this decision was not a final decision upon a CDA claim, but rather a decision under the regulations of the Corps which govern appeals of performance evaluations. See Appendix. In its complaint, Todd Construction cites to 28 U.S.C. § 1491(a)(1) as a basis of jurisdiction. Although 28 U.S.C. § 1491(a)(1) grants this Court jurisdiction over any claim upon any express contract, Todd Construction's claims regarding its performance evaluations are not "claims upon" Todd Construction's contract with the United States. We note that even those cases which found that this Court could assert jurisdiction over nonmonetary CDA claims, discussed below, found their basis for jurisdiction in 28 U.S.C. § 1491(a)(2)'s reference to "other nonmonetary disputes on which a decision of the contracting officer has been issued under section 6 of [the CDA]." Accordingly, in this motion, we set forth the reasons why, under 28 -53

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The Tucker Act grants this Court jurisdiction over CDA "claims," including "other nonmonetary disputes on which a decision of the contracting officer has been issued under section 6 of [the CDA]." 28 U.S.C. § 1491(a)(2). The CDA, in turn, leaves the term "claim" undefined, and thus the Court must look to the Federal Acquisition Regulations ("FAR"), to determine what is necessary for a contractor's submission to be deemed a claim. Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995). The FAR broadly defines a "claim" as "a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising from or relating to the contract." 48 C.F.R. § 52.233-1(c) (2003) (emphasis added). Where, as here, the contractor's claim is that the Government breached its internal policies, rather than the provisions of the contract, such a claim cannot properly be considered a claim "relating to the contract." This is confirmed by the decisions of the United States Court of Appeals for the Federal Circuit, which are binding upon this Court. We are aware of no Federal Circuit decisions providing that a request to amend a performance evaluation may serve as a CDA claim. Rather, those Federal Circuit decisions which hold that the Court of Federal Claims possesses jurisdiction over certain nonmonetary disputes, do so only with respect to claims which directly implicate the terms of the contract. For example, in Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed. Cir. 1999), the Federal Circuit held that the Court of Federal Claims possessed jurisdiction over a contractor's declaratory relief claim. In that case, the contractor sought a declaration that it was not obligated to perform a particular option under the contract

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because the Government had not validly invoked the contractual option clause. Alliant, 178 F.3d at 1263. This claim necessarily invoked this Court's jurisdiction over contractual disputes as the Court was required to interpret the contractual option clause and determine whether indeed the Government had validly invoked the clause. Similarly, in Garrett v. General Electric Company, 987 F.2d 747 (Fed. Cir. 1993), the Federal Circuit found that the Armed Services Board of Contract Appeals possessed jurisdiction over a claim by the Government consisting of a directive to the contractor to take certain corrective action under a contract. There, the Federal Circuit relied upon its prior precedent finding jurisdiction to entertain claims regarding terminations for default, and found that the board properly possessed jurisdiction over the Government's claim as a "nonmonetary substitute for monetary relief." Id. at 750-751. In this case, Todd Construction is seeking neither a nonmonetary substitute for monetary relief nor an interpretation of the contract. Rather, it seeks a determination that the performance evaluations were "unlawful" under the standards for agency action set forth in the APA. Compl. 2-3. Finally, the Federal Circuit has held that the 1992 amendments that added the language to the Tucker Act providing for jurisdiction to consider such "nonmonetary claims" were intended to insure that the Court of Federal Claims had "jurisdictional parity" with the boards of contract appeals. Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1269-70 (Fed. Cir.) (citing Garrett v. General Electric Co., 987 F.2d 747 (Fed. Cir. 1993)), reh'g denied, 186 F.3d 1379 (Fed. Cir. 1999). The boards of contract appeals have consistently held that they possess no jurisdiction to rescind performance evaluations, both prior to and after the 1992 amendments were implemented. See In re TLT Construction Corp., ASBCA No. 53,769, 02-2 BCA ¶ 31,969

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(Aug. 26, 2002); G. Bliuzius Contractors, Inc., ASBCA No. 42,365, 92-1 BCA ¶ 24,605 (Nov. 22, 1991); Konoike Construction Co., ASBCA 40,910, 91-3 BCA ¶ 24,170 (July 2, 1991). Indeed, the boards have specifically held that a request for review of a performance evaluation is not a claim under the Contract Disputes Act. See Konoike, ASBCA 40,910, 91-3 BCA ¶ 24,170. Accordingly, this Court should similarly find that it does not have jurisdiction to entertain Todd Construction's request. The only decision finding jurisdiction of this Court to entertain a request to amend a performance evaluation is Record Steel and Construction, Inc. v. United States, 62 Fed. Cl. 508 (2004). That case may have been wrongly decided, but, in any event, the case is distinguishable from this one. There, the contractor brought a primary claim seeking an equitable adjustment upon the ground that the Government had made a constructive change in the contract by requiring certain "over-excavation" tasks. Id. at 510-11. As the Court explained, "the crux of the parties' dispute is whether the contract at issue required over-excavation." Id. The contractor's claim regarding its performance evaluations was a derivative claim: According to the contractor, the erroneous performance evaluations of the Government were based upon the Government's erroneous determination that the contract required over-excavation. Id. Again, the contractor's claim for nonmonetary relief was directly related to the contract terms. Todd Construction's claims regarding its performance evaluations are not at all related to the terms of the contract. Upon the face of its complaint, Todd Construction's claims are related only to the Government's alleged violations of internal procedures governing the issuance of performance evaluations. Such a claim is properly an APA claim, and therefore cannot be heard in this Court.

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IV.

Even If This Court Did Possess Jurisdiction To Adjudicate Todd Construction's APA Claim, Todd Construction Has Failed To State A Claim For Relief To succeed on an APA claim, Todd Construction would have to show that the actions of

the Corps were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)A). Todd Construction's complaint fails because it does not present any claims or allege any facts in support of its claims. Todd Construction sets forth no facts which would support a claim that the actions of the Corps met the standard required for an APA violation. It simply states that the Corps evaluated Todd Construction's performance as "unsatisfactory" and rejected Todd Construction's appeal of this evaluation. The omission of any factual allegations in support of its APA claim is fatal to its pleading under the standard set forth by the Supreme Court in Bell Atlantic Corp. v. Twombly, 127 S.Ct. at 1964-69. See, e.g., Taylor, 73 Fed. Cl. at 546 (plaintiff failed to state a claim where plaintiff did not allege that the Government breached a contract); Westover v. United States, 71 Fed. Cl. 635, 640 (2006) (plaintiff failed to state a claim where plaintiff did not allege that breach of the neutral references clause was the but-for cause of the loss of his prior employment and associated pay). Its allegation that the actions of the Corps were "arbitrary, capricious, an abuse of discretion and not in accordance with law," is conclusory at best and therefore insufficient to state a claim for relief. Twombly, 127 S. Ct. at 1964-69.

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CONCLUSION For the foregoing reasons, this Court should dismiss Todd Construction's complaint. Respectfully submitted, PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director /s Franklin E. White, Jr. FRANKLIN E. WHITE, JR. Assistant Director Of Counsel: TERRY G. PETERS Senior Assistant District Counsel MARY L. ASHBY Assistant District Counsel Office of Counsel Savannah District US Army Corps of Engineers 100 Oglethorpe Avenue P.O. Box 889 Savannah, GA 31402 Tel: (912) 652-5025 Fax: (912) 652-5126 s/ Maame A.F. Ewusi-Mensah MAAME A.F. EWUSI-MENSAH Trial Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, N.W. Attn: Classification Unit 8th Floor Washington, D.C. 20530 Tel: (202) 353-0503 Fax: (202) 514-8624

August 24, 2007

Attorneys for Defendant

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CERTIFICATE OF FILING

I hereby certify that on this 24th day of August, 2007, a copy of the foregoing "DEFENDANT'S MOTION TO DISMISS" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. The parties may access this filing through the Court's system.

s/ Maame A.F. Ewusi-Mensah

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APPENDIX

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