Free Response to Motion - District Court of Federal Claims - federal

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UNITED STATES COURT OF FEDERAL CLAIMS ______________________________________ ) MULTISERVICE JOINT VENTURE, LLC, ) ) Plaintiff, ) ) No. 06-312C -against) (Judge Wheeler) ) UNITED STATES OF AMERICA, ) ) Defendant. ) ______________________________________) PLAINTIFF'S OPPOSITION TO THE DEFENDANT'S RULE 56(f) MOTION I. INTRODUCTION Plaintiff Multiservice Joint Venture, LLC ("MJV"), through its undersigned counsel, respectfully submits its Opposition to

defendant's Rule 56(f) Motion seeking to delay consideration of plaintiff's Motion for Partial Summary Judgment in the above-captioned Complaint. As discussed below, additional discovery regarding

patently irrelevant matters will not change the salient facts at issue in the pending partial summary judgment motion: (1) the Price

Adjustment Clause required the defendant to compensate the plaintiff for the escalating costs of providing its employees with a

defined-benefit health plan; and (2) the Price Adjustment Clause similarly required the defendant to compensate the plaintiff for the wage increases paid to its employees pursuant to the applicable Collective Bargaining Agreement ("CBA") and corresponding Wage

Determination ("WD"). II. DISCUSSION A. Fed. R. Civ. P. 56(f)

Fed. R. Civ. P. 56(f) provides: Should it appear from affidavits of a party opposing the motion that the party cannot for reasons stated present

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by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just. See Celotex Corp. v. Catrett, 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). However, "[t]he denial of a Rule 56(f) motion for extension should be affirmed where the additional evidence sought for discovery would not have by itself created a genuine issue of material fact sufficient to defeat summary judgment." Stag v. Board of Trustees, 55 F.3d 943, 954 (4th Cir. 1995); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L.Ed.2d 202, 106 S.Ct. 2505 (1986)("only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted."). B. Delaying Resolution of the Damages Issue Does Not Foreclose the Court from Resolving the Issue of the Navy's Liability for Unlawfully Refusing to Compensate MJV for the Escalating Costs of Maintaining its Employees' Health Insurance in 2003-04

In seeking to delay the Court's consideration of the plaintiff's partial summary judgment motion on the Navy's refusal to compensate MJV for its escalating health care costs, in its Rule 56(f) Motion the defendant has contended for the first time that the plaintiff did not incur these costs because the MJV Health & Welfare Fund ("Fund") had "a surplus leftover from the prior contractor." See Defendant's Rule 56(f) Motion ("Motion"), at 3-4. Notably, notwithstanding its 2

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contentions to the contrary, the defendant has never raised this "surplus" argument during current discovery in this proceeding or during earlier consideration of the plaintiff's Request for Equitable Adjustment. 1 More fundamentally, while the Fund did indeed have a carryover balance of approximately $10,000.00 on or about March 1, 2003 when MJV assumed operations at the Naval Academy, over the ensuing twelve months MJV nonetheless incurred over $100,000.00 in additional unreimbursed health care costs as a result of the Navy's refusal to compensate MJV with the requisite $2.68/hour for health and welfare benefits. With that said, in an effort to streamline the instant dispute, the plaintiff will agree to withdraw its motion to the extent it relates to the quantum of damages stemming from the Navy's refusal to compensate MJV for the escalating health care insurance costs in 2003-04. The parties and/or the Court can subsequently determine the exact amount of the shortfall in funding and the exact amount the Navy should have compensated MJV for this expense. Separate and apart from the ultimate measure of the damages in this regard, the plaintiff's motion concerning the Navy's liability here remains ripe for disposition. The amount of the

shortfall and the amount due MJV does not affect the Court's ability

The defendant has asserted that "[w]e have sought discovery related to this issue through interrogatories." Motion, at 3-4. In fact, though, the defendant flatly did not once raise this issue in its interrogatories or in its interrogatory responses to date. A copy of the plaintiff's interrogatory responses is appended hereto as Exhibit A. A copy of the defendant's interrogatory responses is appended hereto as Exhibit B.

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to determine whether the Navy breached the Price Adjustment Clause by refusing to reimburse the contractor for its burgeoning expenses of maintaining an agreed-upon level of health care benefits pursuant to the May 24, 2000 WD. In its Motion, the defendant has not described a scintilla of evidence it would conceivably hope to obtain during the balance of the discovery period which would alter the Navy's liability for not reimbursing MJV for these expenses. To the contrary, as to the issue of liability, the defendant evidently clings to the explanation the Navy singularly provided when it denied MJV's REA: Multiservice was not required to furnish employees with specific defined benefits or identical defined benefits provided for in the predecessor's CBA. As set forth in section 2(a)(2) of SCA and discussed in section 4.163(j) of Regulations, 29 CFR Part 4, a contractor may discharge its fringe benefit obligations by furnishing any equivalent combinations or [sic] fringe benefits or by making equivalent or differential payments in cash. Statement of Uncontroverted Facts ("Statement"), ¶ 8. Accordingly, since the defendant has not offered the prospect of unearthing any evidence in discovery affecting the Navy's liability for violating the Price Adjustment Clause in this instance, then the Court should proceed forthwith with consideration of the partial summary judgment motion as it relates to the liability question. Compare Lear Siegler Services, Inc., v. Rumsfeld, 457

F.3d 1262, 1268-69 (Fed. Cir. 2006); United States v. Service Ventures, Inc., 889 F.2d 1, 4-6 (Fed. Cir. 1990).

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C.

Nothing in the 2000 WD Alters the Fact the Navy Had an Obligation to Reimburse MJV in 2004-05 based on the 2004 WD

No such parsing of liability and damages is required with respect to the Navy's failure to reimburse MJV wages and benefits during the period from March 1, 2004 to February 28, 2005 pursuant to the February 9, 2004 WD. In this respect, the defendant argues obtusely that, "to the extent the contract is ambiguous, extrinsic evidence shows that the parties intended that the contract would incorporate a provision of the predecessor contractor's collective bargaining agreement that would eviscerate plaintiff's claim for labor rate adjustments." Motion, at 4. The defendant does not explicitly

explain what contract -- much less what contractual provision -allegedly appears ambiguous. Id. It is not crystal clear whether

the defendant is referring to MJV's Contract with the Navy, the MJV CBA, the EPES CBA and/or another contract here. Tellingly, after making this ambiguous statement in the text of its Motion about a purported ambiguous contract, the defendant then whispers the essence of its position in a footnote. at 4 fn. 2. Motion,

In short, the defendant fantastically maintains that

the plaintiff had an obligation under the 2000 WD to pay its employees $12.33/hour in wages as of October 1, 2003; and that since the plaintiff did not pay the employees $12.33/hour during the five month period from October 1, 2003 to February 29, 2004, then the Navy had the corresponding right to deduct $0.54/hour prospectively from the $12.49/hour mandated by the 2004 WD during the twelve month period 5

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from March 1, 2004 to February 28, 2005. Id. The defendant's "fuzzy math" argument, however, fails in at least two dispositive respects. First, no additional discovery proposed by the defendant will alter the fact that the 2004 WD expressly governed the level of wages and benefits MJV had to provide its employees and, in turn, the amount the Navy had to reimburse MJV for said wages and benefits for this 2004-05 period. Any dispute concerning whether the plaintiff had

to pay $11.79 or $12.33/hour during the preceding five months under the 2000 WD could not have any potential bearing on the plaintiff and the Navy's reciprocal obligations during the subsequent twelve months under the 2004 WD. 2 In other words, under the 2004 WD, MJV

had to pay its employees $12.49/hour and the Navy had to reimburse MJV $12.49/hour. Period! The 2000 WD does not factor into this

2004-05 operation.

Notably, in its Motion, the defendant failed

Pursuant to the September 2, 2005 finding of its Regional Administrator, the Department of Labor withheld $69,663.73 from MJV for the wages allegedly due for this five month period. The plaintiff is currently challenging this ruling before an DOL Administrative Law Judge. In summary, the plaintiff has contended in this administrative proceeding that the purported sixth year wage increase under the five year EPES CBA could not have possibly become operative because (1) the EPES CBA expired on February 28, 2003, seven months in advance of the purported October 1, 2003 $12.33 wage increase; and the interim collective bargaining negotiations between MJV and NACE vitiated the operation of the "evergreen clause" which could have theoretically extended the EPES CBA and incorporated the October 1, 2003 wage increase. See Paper, Allied-Industrial Chemical and Energy Workers International Union, Local No. 6-0682, 339 NLRB 291 (2003); Allied Industrial Workers, Local Union No. 770, 285 NLRB 651, fn.2 and 654 (1987); Hassett Maintenance Corp, 260 NLRB 1211, 1211 fn. 3 (1982); cf. NLRB v. Hayden Elec., Inc., 693 F.2d 1358, 1363-65 (11th Cir. 1982)(determining that a union may impliedly consent to or acquiesce in the employer's untimely notice of withdrawal by negotiating with the employer); accord IBEW Local 26 v. AdVin Elec., Inc., 98 F.3d 161, 165 (4th Cir. 1996); IBEW Local 915 Health & Welfare Fund v. Rissi, 2006 U.S. Dist. LEXIS 93560 at 11-15 (M.D. Fla. 2006).

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to describe any expectant discovery evidence or any appropriate legal authority which would buttress its unprecedented, contrary argument about the purported purview of the 2000 WD in this 2004-05 period.

The irrefutable fact remains that the 2004 WD, not the 2000 WD, exclusively governed MJV's operations and the Navy's obligations during the 2004-05 period. Compare Fort Hood Barbers Ass'n v. Herman, 137 F.3d 302, 308-12 (5th Cir. 1998)(per curiam)(refusing to prospectively apply the prior employer's wages under the expired WD based on the former CBA in light of the superseding WD based on prevailing wage data); District Lodge No. 166 v. TWA Service, Inc., 1982 U.S. Dist. LEXIS 9861 (M.D. Fla. 1982)(holding the employees were entitled to prospective wage and benefit increases accorded them under the WD). Thus, any potential evidence concerning the

2000 WD would be of absolutely no moment here. Second, even assuming arguendo that an interpretation of the 2000 WD and/or the underlying EPES CBA had some possible bearing on the Navy's obligations as a result of the 2004 WD and/or the underlying MJV CBA, any extraneous evidence concerning these CBAs that the defendant evidently hopes to cull during further discovery would patently contravene the parol evidence rule. See Bexar County Hospital District v. Factory Mutual Insurance Company, 475 F.3d 274 (5th Cir. 2007); Camico Mutual Insurance Co. v. Citizens Bank, 474 F.3d 989 (7th Cir. 2007); Conseil Alain Aboudaram, S.A. v. DeGroote, 460 F.3d 46 (D.C. Cir. 2006). Consequently, the Court should not 7

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admit or otherwise consider any extraneous testimonial or documentary evidence, the putative substance of the defendant's Rule 56(f) Motion as it relates to the plaintiff's partial summary judgment motion on the 2004-05 wages and benefits pursuant to the 2004 WD. IV. CONCLUSION For all the foregoing reasons and the record herein, the plaintiff respectfully requests that the Court expeditiously deny the defendant's Rule 56(f) Motion; and grant its Motion for Partial Summary Judgment as (1) to the question of the Navy's liability for refusing to reimburse the plaintiff for the increased health care insurance costs in 2003-04, and (2) to the questions of the Navy's liability and damages for refusing to reimburse the plaintiff for its increased labor and benefit costs in 2004-05. Respectfully submitted,

s/Janice Davis____ _ Janice Davis Davis & Steele 1100 - 15th Street, N.W. Suite 300 Washington, DC 20005-1720 Telephone: 202-530-5828 [email protected] Email: Counsel to the Plaintiff Dated: December 6, 2007

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CERTIFICATE OF SERVICE I hereby certify that, on the 6th of December 2007, a copy of the plaintiff's Opposition to the defendant's Rule 56(f) Motion was served, via electronic mail, on: Brian T. Edmunds, Esq. Trial Attorney Commercial Litigation Branch Civil Division -- Classification Unit United States Department of Justice 1100 L Street, N.W., 8th Floor Washington, DC 20530 Counsel for the Defendant

s/Janice Davis________________ Janice Davis

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