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

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No. 05-1042C (Judge Lettow)

IN THE UNITED STATES COURTOF FEDERAL CLAIMS THE DALLESIRRIGATION DISTRICT, Plaintiff,

THE UNITED STATES, Defendant.

DEFENDANT'S MOTIONTO DISMISS

PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director FRANKLIN WHITE, JR. E. Assistant Director KELLY B. BLANK Attorney CommercialLitigation Branch Civil Division Departmentof Justice Attn: Classification Unit, 8th Floor 1100 L St., N.W. Washington, D.C. 20530 Tele: (202) 353-7961 Fax: (202) 353-7988 Attorneys for Defendant

Of Counsel: CLARK MILLER Attorney-Advisor Office of the Solicitor United States Department the hlterior of Pacific NorthwestRegion, Boise Field Office Boise, 113 83706

January 26, 2006

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TABLE OF CONTENTS PAGE(S) DEFENDANT'S DISMISS MOTION TO .................................................................................... DEFENDANT'S BRIEF ................................................................................................................ ISSUE PRESENTED ..................................................................................................................... STATEMENT ................................................................................................... OF FACTS THE ARGUMENT ................................................................................................................................. I. Standard Of Review ....................................................................................................... II. This Court Should Dismiss Dalles's ComplaintFor Lack Of Subject Matter Jurisdiction Because Dalles's Claim For Damages Arising Out Of An Allegedly Improper Power Cost Formula Developed in 1989 AndApplied Without Modification Since1989 BarredByTheStatute OfLimitations Is ............................... A. Dalles's Claim For Breach Of Contract Accrued MoreThan Six Years Before FilingOfIts Initial Complaint District Court The In .................................... B. The Continuing Claim Doctrine Does Not Apply To Preserve Dalles's Claim ....................................................................................................................... CONCLUSION ............................................................................................................................ 1 1 1 2 7 7

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TABLE OF AUTHORITIES CASES AlderTerrace, Inc. v. UnitedStates, 161 1372 Cir.1998) F.3d (Fed. ........................................................................................ AriadneFinancial Services Ptv. Ltd. v. UnitedStates, 133 874 Cir.1998) F.3d (Fed. .................................................................................... Brown Park Estates-Fairfield Development v. United States, Co. 127 1449 Cir.1997) F.3d (Fed. .................................................................................. Burichv. United States, 177 C1. 366 984 Ct. 139, F.2d (1966) .............................................................................. Conlevv. Gibson, 355 41 U.S. (1957) ............................................................................................................. CubicDef. Svs. Inc. v. UnitedStates, 45Fed. 239 C1. (1999) ....................................................................................................... Davidsonv. United States, 66Fed. 206 C1. (2005) ..................................................................................................... DynalectronCorp. v. United States, 4 C1.Ct. 424,afPd,758 665(Fed.Cir. 1984) F.2d ........................................................... Friedmanv. United States, 159 C1. Ct. 1,310 381 F.2d (1962) .................................................................................. HoplandBandof PomoIndians v. United States, 855 1573 Cir.1988) F.2d (Fed. .................................................................................... IndiumCorp. of Am.v. Semi-Allo,/s, Inc., 781 879 F.2d (Fed.Cir. 1985), cert__.~, denie__..~d, U.S.820 479 (1986) .................................... Manierev. United States, 31Fed. 410 C1. (1994) ....................................................................................................... Martinezv. United States, 48Fed. 851 CI. (2001) ....................................................................................................... PAGE(S)

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Reynolds v. Amav& Air Force Exch. Serv., 846 746 F.2d (Fed. 1988) Cir. ............................................................................................ Scheuer v. Rhodes, 416 232 U.S. (1974) ........................................................................................................... Tonev v. United States, 43Fed. C1.28 (1999) ....................................................................................................... United States v. King, 395 1 (1969) U.S. ............................................................................................................... United States v. Sherwood, 312 584(1941) U.S. ........................................................................................................... United States v. Testan, 424 392 U.S. (1976) ...........................................................................................................

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STATUTES 28U.S.C. 2501 § .................................................................................................................... 7, 8, 9

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INDEX TO APPENDIX Item Public Law No. 86-745, dated September 13, 1960 Contact No. 14-06-100-2276, dated October 19, 1961 Letter to Don Dean, from Jolm W. Keys III, dated August 23, 1989 Pa~e 1 3 41 42 43 45 46 47 49 53 57 59 61 65 66 67

Letter to John W. Keys K[, from Don W. Bailey, dated September 6, 1989 Letter to Don W. Bailey, from Terrald E. Kent, dated September 28, 1989 Letter to Bureau of Reclamation, from Don W. Bailey, dated October 4, 1989 Notice of Pumping Power Charges, dated February 15, 1990 Approval of Rate Revision, dated November16, t 990 Rate Revision No. 1, The Dalles Project, effective January I, 1990 Rate Revision No. 2, The Dalles Project, effective January 1, 1995 Memorandum, dated May 15, 1995 Record of Execution of Contract, dated May 13, 1996 Rate Revision No. 3, The Dalles Project, effective January 1, 2002 Letter to Mike Richardson, from Terrald E. Kent, dated August 24, 2001 Letter to Bill McDonald,from Marvin Polehn, undated Letter to Terrald E. Kent, from Arden E. Shenker, dated May15, 2003

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS THE DALLESIRRIGATION DISTRICT, Plaintiff, v. THE UNITED STATES, Defendant. )

)
)

)
) ) ) No. 05-I042C (Judge Lettow)

)
) DEFENDANT'S MOTIONTO DISMISS Pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), defendant, the UnitedStates, respectfully requests that the Court dismiss the complaintof plaintiff, TheDalles Irrigation District ("Dalles"), for lack of subject matter jurisdiction. In support of this motion, werely uponthe complaint, the followingbrief, and the appendix accompanying this brief] DEFENDANT'S BRIEF ISSUE PRESENTED Whether this Court possesses jurisdiction to entertain Dalles's claim for damages arising out of the application of defendant's formula to calculate Dalles's am~ual powercosts where Dalles's claim is filed morethan six years after the current fonnula wascreated by the Bom~eville PowerAdministrationin 1989, approvedby the Secretary of the Interior ("Secretary") in 1990, and has beenapplied to calculate Datles's powerrate since 1989.

~ Citations to "Compl. __" refer to a specific paragraphof Dalles's complaint. "Def. '~ App.__" refers to citations to the appendixaccompanying brief. this

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STATEMENTOF THE FACTS Dalles's complaintalleges that the United States Department the Interior ("DOI") of breached its 1961agreementwith Dalles by improperly calculating the powercosts for which Dalles is liable under the terms of the agreement.Compl. 5. 'll In 1960, Congress authorized DOI'sBureauof Reclamationto construct the Western Division of The Dalles Project uponthe Columbia River in Oregon.Se__~ePub. L. No. 86-745 § 2(c) (1960) (Def. App.1). Theauthorizing legislation providedthat po~verand energy required for irrigation pumping TheDalles Project for shall be madeavailable by the Secretary from The Dalles Dana powerplantand other Federal plants intercomaectedtherewith at rates not to exceed the costs of such powerand energy from The Dalles Dam taking into account all costs of the dam,reservoir, and powerplant which are detemfinedby the Secretary under the provisions of the Federal reclamationlaws to be properly allocable to such irrigation pumping powerand energy.

OnOctober19, 1961, Dalles and the United States entered into Contract No. 14-06-1002276("Contract"), pursuant to Pub. L. No. 86-745, to consta-act TheDalles Irrigation Project for the purpose of delivering water to certain lands along the Columbia River. Def. App. 5-6. The Contract stated that DOIwould provide to Datles, from The Dalles Dam powerplant, the power and energy required for irrigation pumping.Def. App. 16. The Contract provided that power and energy would be famished to Dalles at rates per kilowatt-hoursufficient to cover the costs of such po~verand energy from The Dalles Dana, taldng into account all costs of the dam, reservoir and powerplantwhich are determined 2

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by the Secretary under the provisions of the Federal Reclamation Lawsto be properly allocable to such irrigation pumping power and ener~. Theinitial rate shall be one (1) mill per kilowatt-hour. This rate of one(1) mill shall be effective for the first irrigation season and shall continue nntil such time as the Secretary determines, in accordancewith the provisions set forth above, that a different rate is applicable. Sucha determinationshall not be mademorefrequently than once in any five-year period. Def. App. 16-17. Both the Contract and authorizing legislation provided that powerwouldbe furnished to Daltes from hydroelectricity generated at The Dalles Dam,operated by the United States Am~y Corps of Engineers (~Corps"), and transmitted by the Bo~mevillePower Administration(~°BPA"), which markets powergenerated by Federal facilities located within the

Federal ColumbiaRiver PowerSystem. Def. App. 1, 16. In exchange, Dalles would pay "all costs of the dam, reservoir and powerplantwhichare detem~ined the Secretary... to be by properly allocable to such irrigation pumping po~ver and energy." Def. App. 1, 16-17. The Contract further providedthat °°payment [Dalles's] charges for powersupply.., shall be made of each calendar year on the basis of annual estimates by the Secretary," and, if actual costs are determinedto be either higher or lower, Dalles wouldincur either a supplementalcharge or obtain a credit, respectively. Def. App.17-18. In 1989, the BPA proposed to the Bureauof Reclamationa revised formula to detem~ine Dalles's powerrate for the period 1990-1994,effective January I, 1990. Def. App. 49-52. The revised fom~ulaincluded a Lost Revenue component determine the annual cost of lost revenue to by (1) adjusting the prior rate to reflect the difference between rate and actual costs for the the previous five-year period, and (2) predicting future cost increases to nan'ow difference the betweenthe revised rate and actual costs that wouldnot be known until the next rate

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determination. Def. App. 49-50. In addition, the revised formula included components for annual depreciation and the costs of operation and maintenanceassociated with power generation. Def. App.50. As a result of the newformula, Dalles's proposedrate for the period 1990-1994was 1.23 mills per kilowatt-hour. Def. App. 49. OnAugust23, 1989, JoIn1 W. KeysIII, Regional Director oftbe Bureauof Reclamation, informedDalles that the revised rate proposal wouldgo into effect uponan interim basis subject to approval by the Secretary. Def. App. 41. OnSeptember6, 1989, DonW. Bailey, Dalles's Chairman the Board, wrote to DOIregarding the revised rate proposal. In his letter, Mr. of Bailey stated that "I assume that your office is awareof the various specific terms of our contract with the Government to powercost .... as At our Boardof Directors meetinglast evening, the

Boardexpressed concern about how[Dalles's] rate could increase 2½times in about five years." Def. App. 42. Mr. Bailey requested further information so that Dalles "mayunderstand bowthat cost has been calculated under your newformula."Id._~. On September28, 1989, Terrald E. Kent, the Bureauof Reclmnation's Acting Regional Supervisorof Water, Powerand Lands, providedcost data to Dalles reflecting the "typical costs of The Dalles Powerplantwhich are used in determining the irrigatinn pumping powerrate... compiledby the [BPA]from data supplied by the [Corps] 2' Def. App. 43-44. In addition, Mr. Kent'sletter set a date for the parties to meetand discussthe calculationof the rate. Id__~. OnOctober 4, 1989, Mr. Bailey informed DOIthat the cost data provided was not "pertinent" and asserted that "[o]peration & maintenance were specifically excluded in

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calculating our powercost. ''z Def. App.45. Mr. Bailey requested the "current generation cost at TheDalles Dam,in accordancewith terms of our contract." Id_~. OnFebruary 15, 1990, DOIissued a notice of pmnping powercharges to Dalles for calendar year 1990 based upon the revised BPA fornaula. Def. App. 46. On November 1990, 16, the Assistant Secretary, Waterand Science, approvedthe proposedrevision to Dalles's power cost formula. Def. App. 47-48. In t994, DOIadjusted the rate for powerand energy at The Dalles Dam 1.31 mills per to kilowatt-hour, effective January 1, 1995. Def. App. 53. DOIapplied the samemethodology for determiningDalles's powerrate that it used for the period 1990-1994,including depreciation costs, operation and maintenancecosts, and a Lost Revenue component its calculations. in Com a.p_g~ Def. App. 53-56, with Def. App. 49-52. In a DOImemorandum dated May15, 1995, the Manager the PowerResourcesOffice stated that "[n]o change is proposedin the of methodologyfor determining the rates." Def. App. 57. OnMay13, 1996, the updated charges for Datles s powerand ener~y costs were approved. Def. App. 59-60. In 2001, DOIadjusted the rate for powerand energy at The Dalles Dam 2.59 mills per to kilowatt-hour, effective January 1, 2002. Def. App. 6t. DOIapplied the samemethodology for determiningDalles's powerrate that it used for the period 1990-2001¯ including depreciation costs, operation and maintenance costs, and a Lost Revenue component its calculations. in Corna.p_g~ Def. App.61-64, with Def. App. 49-52, 53-56. OnAugust24, 2001, Mr. Kent 2 Mr. Bailey appears to have misanderstood that the cost data providedto him related to operation and maintenancecosts associated with poweroeneration, not powertransmission. Se_~e Def. App. 44. Although the Bureau of Reclamation and BPA agreed in 1961 that Dalles would not be charged operation and maintenance costs associated with powertransmission, Dalles is responsible for costs associated with powergeneration. 5

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inforrned Dalles that DOIhad established a revised rate for the period 2002-2006.Def. App.65. ha an undated letter to DOI,MarvinPolelm, Dalles's Chairman the Boardof Directors, of stated: Theposition of the Boardof Directors of TheDalles Irrigation District concerning[Dalles's] powerrate continues to be the position set forth in that letter from formerBoard Chairman Don Bailey to the Bureauof Reclamationdated October4, 1989, a copy of whichis attached .... The forn~ula continuously used to compute[Dalles's] powerrate since 1961has never included a charge for a "lost revenue component,"nor does our contract provide for such a charge. Rather, our rate is to be based solely on generationcosts at the Dalles Dam. 3 Def. App.66. OnMay15, 2003, Dalles's attorney wrote to Mr. Kent and reiterated Dalles's position that, under the powerrate forn~ula, Dalles has been "overcharged,since 1989," stating: Prior to 1989[Dalles] waschargedat the rate of 1 mil per kilowatt hour. That was the original contemplation in the ageementwith you. If you can explain to us howthat portion of the bills that have been tendered to [Dalles] shows,since 1989, that the actual costs of the productionof powerare in excess of that 1 millage rate, we will appreciate your makingthose explanations for us. Def. App. 67-68. OnAugust18, 2004, Dalles filed a complaintin the UnitedStates District Court for the District of Oregonagainst DOIalleging breach of contract. OnSeptember28, 2005, the district court transferred Dattes's complaintto this Court. OnOctober25, 2005, Dalles filed its amended complaintwith this Court. 3 Manifestly, Dalles's powerrate has included a Lost Revenuecomponent since 1989. Def. App. 49-50.

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Dalles seeks recovery from the United States in the amountof $400,000.00for damages 4 arising out of application of the 1989powercost formulasince 1998, as well as a declaratory judgmentthat Dalles "should not be charged.., for any costs for powerand energy.., required for irrigation pumping during the irrigation season, other than those costs as providedby the contract between parties." Compl. the '~t'~I 8, 11. ARGUMENT I. Standard Of Review In general, the Court should not want a motionto dismiss "unless it appears beyonddoubt that the plaintiff can prove no set of facts in support of his claim whichwouldentitle himto relief." Conlevv. Gibson, 355 U.S. 41, 45-46 (1957). Subject matter jurisdiction, however,may be challengedby the parties or raised by the Court at any time, and, if jurisdiction is foundto be lacking, the Court mustdismiss the action. Se_..~e RCFC 12(h)(3). In evaluating a motionto dismiss for lack of subject matter jurisdiction, the Court must presume undisputedfactual allegations to be true and construe all reasonable inferences in all favor of the plaintiff. Scheuer v. Rhodes,416 U.S. 232, 236-37 (1974); Reynoldsv. Amav Air &

Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988). Notwithstanding this general rule, it well settled that wherethe movant challengesspecific jurisdictional facts set forth in the

4 Implicitly acknowledging application of the six-year statute of limitations set fortb the in 28 U.S.C. § 2501, Dalles suggests that it is entitled to all damages flowing fromthe Government's alleged breach which have accrued since 1998, or within the six years prior to the filing of its complaintin district court. Compl. 8. However, ~ Dalles does not identify what event in 1998 constitutes an alleged breach of the 1961agreement. Indeed, an updated rate was not chargedto Dalles in 1998. Rather, in 1998, Dalles wasstill payingits powercosts according to the rate whichhad been first assessed against Dalles in 1995('eased uponapplication of the 1989 formula adopted by DOI). Def. App.65. The 1995 rate continued to apply until 2002. Ida. 7

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complaint, the Court mayconsider all relevant evidence(including matters not raised in the pleadings) and make factual findings necessaryto resolve the issue of jurisdiction. See, e_~., any IndiumCorp. of Am.v. Semi-Allovs.Inc., 781 F.2d 879, 884 (Fed. Cir. 1985), cert. denied, 479 U.S. 820 (1986); Manierev. United States, 31 Fed. C1.410, 413 (1994). Wherethe underlying jurisdictional facts are challenged, plaintiffbears the burdenof establishing the Court's jurisdiction by a preponderance the evidence. See, e_~% of CubicDef. Svs. Inc. v. UnitedStates, 45 Fed. C1.239, 245 (1999). II. This Court Should Dismiss Dalles's ComplaintFor Lack Of Subject Matter Jurisdiction Because Dalles's Claim For Damages Arising Out Of AnAllegedly Improper PowerCost FormulaDeveloped in 1989 AndApplied Without Modification Since 1989 Is Barred By TheStatute Of Limitations TheUnitedStates Court of Federal Claimsis a court of limited jurisdiction. Dvnalectron Corp. v. UnitedStates, 4 CI. Ct. 424, 428, aff'd, 758F.2d 665 (Fed. Cir. 1984). Its jurisdiction entertain a suit and to grant relief dependsupon, and is circumscribedby, the extent to whichthe United States has waivedits sovereig~ immunity.United States v. Testan, 424 U.S. 392, 399 (1976); United States v. Sherwood,312 U.S. 584, 586 (1941). A waiver of sovereign inmmnity of the United States camlot be implied, but must be unequivocallyexpressed by Congress. Testan, 424 U.S. at 399; United States v. Kin~, 395 U.S. 1,4 (1969). Absent congressional consent to entertain a claim against the UnitedStates, the Court of Federal Claimslacks authority to grant relief. Testan, 424 U.S. at 399; Sherwood, U.S. at 586. 312 Dalles's claim arising from the approval and application of a newpowercost formula since 1989is barred by the six-year statute of limitations set forth in 28 U.S.C. § 2501. Section 2501states that "[e]very claim of whichthe United States Court of Federal Claimshas

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jurisdiction shall be barred unless the petition thereon is filed within six years after suchclaim first accrues." 28 U.S.C.§ 2501.Thesix-year statute of limitations "is a jurisdictional requirement attached by Congressas a condition of the government'swaiver of sovereign immunityand, as such, must be strictly construed." HoplandBandof Pomo Indians v. United States, 855 F.2d 1573, 1576-77(Fed. Cir. 1988). To prove that its claim is not time barred, Dalles must showthat its "claim first accrued within six years of the filing of the complaint." Martinezv. United States, 48 Fed. CI. 851,857 (2001) (emphasisadded). A claim first accrues "whenall the events whichfix the govelaament's alleged liability have occurred and the plaintiffwas or should have been awareof their existence." HoplandBand, 855 F.2d at 1577. A. Dalles's Claim For Breach Of Contract AccruedMoreThan Six Years Before The Filing OfIts Initial Complaint District Court In

Dalles filed its complaintin the district court on August18, 2004, and its complaintin this Court on October 25, 2005. The Goverrmaent's alleged breach of the Contract arising from the approval of an allegedly improper powercost fomaula, however, occurred morethan six years before Dalles filed its original complaint district court. Evenassunfinga_.gr~uendo the in that Government breach the Contract by approvingthe addition of certain components the did to formulafor Dalles's powerrate, Dalles's claim accrued, a_t the latest, on November 1990, 16, whenthe Assistant Secretary approvedthe formula uponbehalf of the Secretary. Def. App.48. Although rate charged to Dalles has been adjusted periodically since 1989, the formulaitself the has remainedunchanged since Dalles wasfirst notified of its development 1989, and its in approval by the Secretary in 1990.

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In addition, the fact that Dalles possessedknowledge 1989of its potential cause of in action supports the conclusionthat the statute of limitations accrued at that time. Hopland Band, 855 F.2d at 1577-78(claim accrues whenclaimant knewor should have known that claim existed). In 1989, Daltes wasnotified that a newformulahad been adoptedto calculate its power rate and exchanged series of letters with DOIarticulating its concernsregarding the fornmla a revisions. Def. App. 41-45. OnSeptember6, 1989, DonBailey, the Chairmanof the Dalles Boardof Directors, stated that "I assumethat your office is awareof the various specific terms of our contract with the Government to powercost," and requested further infornaation so that the as Board "mayunderstand howthat cost has been calculated under your newfornaula." Def. App. 42 (emphasis added). After receiving explanatory cost data from DOI, on October 4, 1989, Mr. Bailey rejected the cost data as not "pertinent," and requestedthe "cunentgeneration cost at [t]he Dalles Dana, in accordancewith terms of our contract." Def. App.45. Thus, Dalles's Board of Directors plainly believed that the newformulamayhave violated the ternas of the Contract. However, despite believing that the revised formulawascontaary to the terms of the Contract, Dalles waited 12 years to take any action. It waited to express its concernsabout the rate formulauntil after it wasinformedof the rate increase to take effect on January1, 2002. In an undatedletter sent to DOI after notification of the rate increase for the 2002-2006 period, MarvinPoletm, Dalles's Chairman the Board of Directors, stated: of Theposition of the Boardof Directors of TheDalles Irrigation District concerning[Dalles's] powerrate continues to be the position set forth in that letter from former BoardChairnaanDon Bailey to the Bureauof Reclamationdated October 4, 1989, a copy of whichis attached.., our rate is to be based solely on generation costs at the Dalles Dam.

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Def. App.66 (emphasis added). Byits ownadmission, Dalles's objection to the 2002 powerrate increase is the sameas its o_.hjb'ectionto the 1990rate increase, and basedentirely upona formula that, in Dalles's view, includes components permitted under the terms of its Contract. not Indeed, in a letter to DOI,Dalles's attorney reiterated Dalles's position that, underthe 1989rate fom~ula, Dalles had been "overcharged, since 1989." Def. App. 67 (emphasis added). Dalles's attorney further explainedthat Prior to 1989[Dalles] waschargedat the rate of 1 mil per kilowatt hour. That was the ori~nal contemplation in the a~eementwith o.y~. If youcan explain to us howthat portion of the bills that have beentendered to [Dalles] shows,since 1989, that the actual costs of the productionof powerare in excess of that 1 millage rate, we will appreciate your makingthose explanations for us. Def. App.68 (emphasisadded). Thecorrespondencereflects the fact that Dalles rested uponits rights by not seeking damages until 2004 for being "overcharged, since 1989," based upona rate formula which allegedly violated the terms of the Contract. De£App. 67. Althoughunclear, Dalles's complaint suggests that the Govermnent's alleged breach reaccrued each year in which it was charged powercosts according to the 1989 BPA formula. Compl. 8. Dalles's allegation incorrectly assumesthat the alleged breach occurred mmually ~I despite the fact that all of the events whichfirst fixed the Government's liability, assuming that the 1989formula constituted a breach, occurred in 1989and 1990. In the case of an alleged breach of contract, "a cause of action accrues whenthe breach occurs." Alder Terrace. Inc. v. United States, 161 F.3d 1372, 1377(Fed. Cir. 1998) (quotation omitted). In its complaint, Dalles alleges that a breach arises from the fact that "defendantshavebeen charging[Dalles] with costs for the operation, maintenance, replacementof facilities, together with interest expenses, and

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none of which had been agreed to betweenthe parties." Compl.']15. Assuming ar~uendothat this allegation is true, the Government first determinedto charge such expenseswhenit revised the powercost formula in 1989and the Assistant Secretary approvedthe revised fomaulain 1990. Accordingly,all of the events fixln~ the Government alleged liability occnrred in 1989 s and 1990. B. The Continuina Claim Doctrine Does Not Apply To Preserve Dalles's Claim

Dalles may avail itself of the continuingclaimdoctrine in order to satisfy the statute not of limitations because the alleged breach flows from specific events whichoccun'edoutside of the limitations period. Thecontinuing claim doctrine "operates to save later arising claims even if the statute of limitations has lapsed for earlier events." AriadneFinancial ServicesPty. Ltd. v. UnitedStates, 133 F.3d 874, 879 (Fed. Cir. 1998). In order for the continuing claim doctrine apply, Dalles's claim "mustbe il~aerently susceptible to being broken down into a series of independent and distinct events or wrongs, each having its ownassociated damages."Brown Park Estates-Fairfield Development v. United States, 127 F.3d 1449, 1456 (Fed. Cir. 1997). Co. In Friedmanv. United State~, 159 Ct. C1.1,310 F.2d 381,384-85 (1962), the Court of Claims explained that the continuing claim doctrine is limited generally to cases wherethe Government has a duty to make periodic payments,such as military and civilian pay cases wherethe plaintiff is statutorily entitled to payment,because "wherethe payments to be madeperiodically, each are successive failure to makeproper payment gives rise to a newclaim." See also Burich v. United State~, 177 Ct. C1. 139, 366 F.2d 984, 986 (1966) (finding that failure to makeovertime payments plaintiff constituted separate violations of the applicable statute each time payanent to was not made). However,"a claim based upon a single distinct event, which mayhave continued 12

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ill effects later on, is not a continuing claim." Brown Park, 127 F.3d at 1456. Dalles's claim is morelike the latter style of claim becauseit arises fromtwodistinct events: the revision of the formulain 1989and the approval of the revised fomaulain 1990. AlthoughDalles alleges that it was damaged every year in whichan allegedly ilnproper powerrate was applied, the later adverse effects constitute damages resulting from DOI'sapproval of a formula which allegedly violated the terms of its ageement with Dalles. The court in Brown Park fnrther explained that, in cases wherecourts have found that a claim maybe "broken downinto a series of independentand distinct wrongsor events ..... Each

wrong constituted an alleged violation of a statute or regulation that accruedwhenthat particular wrongoccurred, independent of the accrual of other wrones." Brown Park, 127 F.3d at 1457 (emphasisadded); See also Ariadne Financial, 133 F.3d at 879-80(continuing claim doctrine not apply whereGovernment's liability wasfixed when rejected a tema of its contract entitling it plaintiff to the use of supervisory goodwill, despite the fact that the Govenmaent subsequently repeatedly denied such use); Davidson United States, 66 Fed. C1. 206, 209-10(2005) v. (continuing claim doctrine does not apply where the claim concerns the Government's recalculation of plaintiff's paymentsin 1995, despite the fact that subsequentmonthlypayments were madeaccording to the alleged miscalculation); Toner v. United States, 43 Fed. C1.28, 31 (1999) (continuing claim doctrine does not apply whereplaintiff fails to allege "an independent violation of any cited statute or regulation duringthe six years prior to instituting suit"). In this case, the alleged wrong Dalles -- applying an am~ualpowerrate according to an to improperformula -- occurred whenthe forn~ula whichserves as the basis of Dalles's claim was first developedand approved.The fact that Dalles's powerrate was adjusted periodically 13

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according to the 1989 formula does not meanthat a new wrongwas committedagainst Dalles every time costs were assessed at a newpowerrate. In other words, the periodic recalculations of Dalles's powerrate are not independentwrongs;rather, each newpowerrate is based uponone formula, and the alleged wrongflows from the inclusion in that formula of components which allegedly violate the temps of Dalles's agreement.See Def. App.49-52, 53-56, 61-64. BecauseDalles does not allege that the Government's breach of contract accrued within the six years prior to filing its complaint the district court on August 2004,this action is in 18, barred by the statute of limitations. Consequently, this Courtis withoutjurisdiction to entertain Dalles's claim for damages its complaint. RCFC in 12(b)(1). CONCLUSION For the foregoing reasons, we respectfully request that the Court gant defendant's motion to dismissfor lack of subject matter jurisdiction. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director

S/FRANrICLIN WHITE.JR. E. FRANI~INE. WHITE, JR. Assistant Director

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Filed 01/26/2006

Page 20 of 21

Of Counsel: CLARK MILLER Attorney-Advisor Office of the Solicitor UnitedStates Department the Interior of Pacific NorthwestRegion, Boise Field Office Boise, 113 83706

S/KELLY B. BLANK KELLY B. BLANK Attorney CommercialLitigation Branch Civil Division Departmentof Justice Attn: Classification Unit, 8th Floor 1100 L St., N.W. Washington, D.C. 20530 Tele: (202) 353-7961 Fax: (202) 353-7988 Attorneys for Defendant

January 26, 2006

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Case 1:05-cv-01042-CFL

Document 8

Filed 01/26/2006

Page 21 of 21

CERTIFICATE OF FILING I hereby certify that on January 26, 2006, a copy of the foregoing "DEFENDANT'S MOTION DISMISS" filed electronically. I understand that notice of this filing will be TO was sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

/s/KELLY B. BLANK