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

Case 1:06-cv-00312-TCW

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS MULTISERVICE JOINT VENTURE, LLC, ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. )

No. 06-312C (Judge Wheeler)

RULE 56(f) MOTION TO STAY PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT PENDING COMPLETION OF, AND, IN THE ALTERNATIVE, MOTION TO ENLARGE THE TIME FOR RESPONDING Pursuant to Rule 56(f) and paragraphs 11 and 12 of Appendix A of the Rules of the United States Court of Federal Claims ("RCFC"), we respectfully request that the Court stay the briefing schedule for plaintiff's motion for partial summary judgment until, after the completion of discovery, the Court schedules a deadline for submission of responses to plaintiff's motions for summary judgment, as well as any cross-motion that the Government may submit. Plaintiff opposes this motion. If this motion is denied, however, we respectfully request an enlargement of 14 days, through and including December 5, 2007, in which to respond to plaintiff's motion.1 Plaintiff consents to this alternative request. BACKGROUND Insofar as relevant to the present motion, the complaint alleges, inter alia, that plaintiff, Multiservice Joint Venture, LLC ("Multiservice"), is entitled to an equitable adjustment for

Such an enlargement is necessary due to the fact that the undersigned counsel's time has been constrained litigating a bid protest in this Court, Great Lakes Dredge & Dock Co. v. United States, No. 07-765, and several other matters, and so that the Court may have time to rule on this Rule 56(f) motion. Our response is currently due on November 21, 2007. We have not previously requested an enlargement for this purpose.

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increased wages and health contributions that it allegedly paid to its janitorial employees who worked at the United States Naval Academy under a contract it entered with the United States. The alleged increased wages and contributions were increases it allegedly paid pursuant to the contract and its collective bargaining agreement with the employees' union. Compl. ¶¶ 7-15. The question of plaintiff's entitlement to an equitable adjustment accounts for most of the damages at issue in this case. Multiservice, which was awarded its contract in February 14, 2003 and began performance on March 1, 2003, contends that it is entitled to the difference between the former $11.79 per hour in effect until October 1, 2003 under the predecessor contractor's collective bargaining agreement, and later rates that went into effect under its collective bargaining agreement on March 1, 2004. Multiservice also claims that it is entitled to the difference between the $2.15 benefits rate paid by its predecessor and the higher rates it allegedly paid for increased health and welfare benefits because it was required to provide the same level of fringe benefits, as opposed to the same payment. Plaintiff claims that "no dispute of material fact exists concerning the plaintiff's claims" for an equitable adjustment for increased wage and benefit rates, and that it is therefore entitled to summary judgment. Pls. Mem. Pts. & Auths. ("Pls. Mem.") at 4. The United States has filed this motion because we believe that summary judgment on plaintiff's claim for an equitable adjustment is premature, prior to the close of fact discovery in this case. Factual issues may exist upon which discovery is necessary.

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ARGUMENT Rule 56(f) provides nonmovants with protection from being `railroaded' by premature summary judgment motions. Celotex Cop. V. Catrett, 477 U.S. 317, 326 (1988). The rule provides that a party, faced with a summary judgment motion, who "cannot for reasons stated present 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." RCFC 56(f). In interpreting this rule, the United States Court of Appeals for the Federal Circuit has recognized that under this rule a party "cannot be deprived of the discovery needed to place at issue material factual questions in opposition to the motion." Opryland USA, Inc. v. Great Am. Music Show, Inc., 970 F.2d 847, 852 (Fed. Cir. 1992). All the party must show is that the discovery sought "is directly related to the principal issues raised" and that there is "more than a mere speculative hope of finding evidence that might tend to support a claim." Id. See Affidavits made "on information and belief" are sufficient. Id. In this case, as the attached Declaration of Brian T. Edmunds ("Edmunds Decl.") demonstrates, several factual issues arise in connection with plaintiff's claim for an equitable adjustment based upon wage and fringe benefits increases. Although there are many legal questions as to the meaning of governing regulations and provisions in the contract, factual issues are also embedded in plaintiff's motion for summary judgment. First, the Government has reason to believe that the plaintiff did not incur the costs it alleges it has incurred. For example, it is our understanding that plaintiff may not have paid the fringe benefit costs it claims, based upon a surplus left over from the prior contractor. We have

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sought discovery related to this issue through interrogatories, and plan to seek additional information through depositions which we have not yet taken, to determine whether in fact this understanding is correct. If it is correct, Multiservice is clearly not entitled to summary judgment. Servidone Construction Corp. v. United States, 931 F.2d 860, 861 (Fed. Cir. 1991) ("injury" is an element of a claim for equitable adjustment); SAB Constr., Inc. v. United States, 66 Fed. Cl. 77 (2005) ("[T]he measure of an equitable adjustment is the actual costs incurred in performing the contract.") (emphasis in original). Second, although the Government believes that the contract language and provisions of the Service Contract Act of 1965 governing the contract are clear on their face and support the Government, we would likely contend in the alternative, if supported by evidence obtained in discovery, 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 claims for labor rate adjustments.2 Thus, factual issues may arise in the interpretation of the contract in this case. Both of these reasons militate against the Government responding or the Court deciding

Because the predecessor contractor's collective bargaining agreement provided for a wage of $12.33 beginning upon October 1, 2003, we will contend in our response to plaintiff's motion that Multiservice is entitled to only the difference between that wage rate and the $12.49 wage rate pursuant to the Service Contract Act of 1965 and the FAR clause that implements it, which was incorporated into the contract. See 41 U.S.C. § 353(c) (providing that a new contractor must pay wage rates negotiated under a predecessor contractor's collective bargaining agreement that would have applied had the predecessor contractor continued to perform the contract); 48 C.F.R. § 52.222-41(f) (same); Pl. Ex. 2 at 4. If the Court finds the contract ambiguous, however, we would like to provide extrinsic evidence showing that Multiservice followed the same interpretation as the Government. 4

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plaintiff's motion for summary judgment at this stage of proceedings, rather than a mere two months from now, when discovery will be concluded. If it is in fact true that Multiservice did not pay increased fringe benefit costs, the Court will not need to issue an advisory opinion on the question of plaintiff's entitlement to those costs under governing regulations. Further, the Court should not decide now the meaning of the contract when extrinsic evidence could be necessary to interpret it. Additionally, plaintiff's motion interferes with the discovery schedule contemplated by this Court. In granting the parties' last request for an enlargement of the discovery schedule, the Court made clear that it expects discovery to be completed by its January 18, 2008 deadline. See Order of August 23, 2007 ("The parties should note, however, that further extensions of time to complete discovery will not be granted absent a showing of extraordinary circumstances."). The parties have completed some written discovery, but additional written discovery and depositions will be necessary to prepare this case for adjudication. This is expected to take a substantial amount of time. By filing its motion for summary judgment, Multiservice has already placed considerable burden on both parties in completing discovery in compliance with the Court's order. Instead of briefing, arguing, and ruling upon this motion now, the Court should defer our response, any potential cross-motion, plaintiffs' reply, argument, and its ruling until the close of discovery, as contemplated by RCFC Appendix A, paragraphs 11 and 12. This will properly facilitate the orderly and efficient resolution of this case. See RCFC 1. The premature and piecemeal litigation of plaintiff's motion for summary judgment now, before it is ripe for decision, will not advance the resolution of this case in any way. There are still many other

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issues in this case and there is no reason why Multiservice would be prejudiced by waiting a mere two or three months, until after the scheduling conference contemplated by paragraph 11, to resolve this issue. CONCLUSION For these reasons, we respectfully request that the Court stay proceedings regarding Multiservice's motion for partial summary judgment pending completion of discovery and the holding of a status conference pursuant to RCFC Appendix A, paragraphs 11 and 12. Respectfully submitted, PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director s/ Martin F. Hockey, Jr. MARTIN F. HOCKEY, JR. Assistant Director s/ Brian T. Edmunds BRIAN T. EDMUNDS Trial Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, NW Attn: Classification Unit, 8th Floor Washington, DC 20530 (202) 616-8253 November 19, 2007 Attorneys for the United States

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CERTIFICATE OF FILING I hereby certify that on November 19, 2007, a copy of the foregoing "RULE 56(f) MOTION TO STAY PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT PENDING COMPLETION OF, AND, IN THE ALTERNATIVE, MOTION TO ENLARGE THE TIME FOR RESPONDING," together with the supporting declaration, was filed electronically. Parties may access this filing through the Court's electronic filing system.

s/ Brian T. Edmunds

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