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

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 1 of 14

IN THE UNITED STATES COURT OF FEDERAL CLAIMS STATES ROOFING CORPORATION, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) )

No. 05-960C (Judge Bush)

PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION TO DISMISS For its brief in opposition and response to the Motion to Dismiss filed herein by Defendant United States of America ("Government"), Plaintiff States Roofing Corporation ("SRC") states as follows: I. SUMMARY OF ARGUMENT The Armed Services Board of Contract Appeals ("ASBCA" or "Board") has not made a jurisdictional determination in the case before it, and therefore SRC's protective appeal to this Court is permissible and should not be dismissed; instead, this case should be stayed pending final determination of the ASBCA appeals as moved by SRC. II. ARGUMENT A. THE ASBCA HAS NOT RULED ON JURISDICTION

While both SRC and the Government believe the ASBCA has jurisdiction of SRC's two related appeals, the ASBCA has not made that determination. The furthest this question has thus far gone is the Board Judge's Memorandum memorializing the 3 November 2005 conference call, during which this protective action and that issue were briefly discussed. Exhibit A hereto. At the Board Judge's direction, the parties thereafter filed a joint statement regarding jurisdiction. Therein (Appendix 106-08 to the Government Motion), both parties acknowledged

1

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 2 of 14

their belief that jurisdiction lies with the ASBCA. However, as also noted therein, despite SRC's request, the Government refused to stipulate that neither party would thereafter seek to challenge jurisdiction in that or any appellate action (A107). Therefore, the parties' acknowledgement is not finally dispositive of the jurisdictional issue, and the Board simply has not ruled on jurisdiction one way or the other. As the Government notes, the Board has accepted and docketed SRC's notices of appeals, a complaint and answer have been filed with the Board, and discovery has commenced in the ASBCA action. This is because, as SRC notes in its protective complaint herein, the parties prefer to proceed in that forum. But these facts do not equate to a determination by the Board that it has jurisdiction over SRC's claims, and without such a determination the proceeding before this Court is not ripe for consideration of dismissal pursuant to the Election Doctrine. National Neighbors, Inc. v. United States, 839 F.2d 1539, 1543 (Fed. Cir. 1988) ("For the proceeding before the Claims Court to be ripe for action, the board first must determine whether, as a matter of fact, [the contractor's] appeal was timely and thus whether, as a matter of law, the board has jurisdiction over [the contractor's] appeal."). In fact, even if the parties had agreed to waive their right to challenge the Board's jurisdiction, the Board or a court could nevertheless challenge jurisdiction sua sponte. See, e.g., United States v. Newport News Shipbuilding and Dry Dock Co., 933 F.2d 996, 998 n.1 (Fed. Cir. 1991) ("[J]urisdiction may be challenged at any time, even on appeal, and by no means do we imply that the government ... has waived, or could waive or moot an issue of the Board's jurisdiction."); Appeal of Cosmic Constr. Co., 82-1 BCA ¶ 15,541, ASBCA No. 26,537, aff'd Cosmic Constr. Co. v. United States, 697 F.2d 1389 (Fed. Cir. 1982) (raising timeliness of the filing of an ASBCA appeal sua sponte and subsequently dismissing the appeal with prejudice).

2

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 3 of 14

Of course, SRC does not believe such challenge would be warranted under the facts, but nevertheless without a definitive ruling on jurisdiction this remains possible. B. THE ELECTION DOCTRINE IS INAPPLICABLE ABSENT JURISDICTION OF THE INITIAL FORUM

The Government admits that "[a]n exception to the binding nature of the Election Doctrine is where the board dismisses an action as untimely." Government Motion, at 11. It then identifies two cases that recognize the "untimeliness" exception to the Election Doctrine, Cosmic Construction Co. v. United States and Olsberg Excavation Co. v. United States. Id. Both cases involved the same holding; to-wit: "An untimely `appeal' to an agency board of contract appeals is an absolute nullity, if indeed not a contradiction in terms. ... The plain terms of section 10(a)(1) of the 1978 (Contract Disputes) act gave plaintiff a right, `in lieu of' appealing to the board in a timely fashion, to bring an action in this court (within the congressionally prescribed time limit for doing so). That right is not lost merely by attempting, in a patently untimely fashion, to pursue an option that no longer existed (footnote omitted)." Cosmic Construction, 5 Cl. Ct. 237, 240 (1984) (quoting Olsberg Excavating, 3 Cl. Ct. 249, 25152 (1983)). Hence, if SRC's appeal to the ASBCA is determined to be untimely, it would be a nullity and SRC could not have made a binding election to litigate before the Board. See National Neighbors, Inc. v. United States, 839 F.2d 1539, 1543 (Fed. Cir. 1988) ("[A]n untimely appeal to the board is not a binding election under the Election Doctrine and will not preclude a contractor from pursuing a timely suit in the Claims Court."). The Government's motion herein focuses only on the first, but not the second, prong of the two-part election test. That test has been stated thusly: "[T]he contractor commits itself to a binding election only when: 1) it has sought to avail itself of one forum over another; and 2) that forum has the ability to exercise jurisdiction at the time the election is attempted." Jo-Mar Corp.

3

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 4 of 14

v. United States, 15 Cl. Ct. 602, 605 (1988) (citing National Neighbors, 839 F.2d at 1542) (emphasis added). In short, "it is a contractor's filing of an appeal or initiation of a suit in a forum with jurisdiction over the proceeding that precludes the contractor, pursuant to the Contract Disputes Act, from pursuing its claim in the alternate forum." National Neighbors, 839 F.2d at 1542 (emphasis in original). Again, while SRC does not dispute seeking appeal to the ASBCA, the question of jurisdiction remains unresolved and therefore the second prong is not met. Unless and until the ASBCA makes a final jurisdictional determination there cannot be a binding election under the Election Doctrine. See id. at 1543; see also Appeal of Thomas & Sons Building Contractors, Inc., 00-2 BCA ¶ 31086, ASBCA No. 51,577 ("Where the action is pending in the first forum and that forum has not determined jurisdiction, an appeal is not ripe for dismissal under the Election Doctrine until the original forum determines its jurisdiction over the claim."). The Government's motion is accordingly premature, at best. Contrary to the Government's implication, the Claims Court's reference in Cosmic Construction and Olsberg Excavating to a "subsequent" filing merely indicates that the filing in the second forum must occur subsequent to the filing in the first forum, not subsequent to the dismissal by the first forum. See National Neighbors, 839 F.2d at 1543. Otherwise, a contractor could be left without an appellate remedy, regarding which this Court's predecessor Court noted in Cosmic Construction as follows in rejecting the Government's similar contentions therein: "In the facts and circumstances of this case, to uphold the government's position would be effectively to preclude any `adjudication,' administrative or judicial, of the validity vel non of the contracting officer's denial of plaintiff's timely initiation of a direct action on the claims in this court. Such a result is neither reasonable nor in keeping with the purpose and intent of the 1978 act."

4

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 5 of 14

Cosmic Constr. Co. v. United States, 5 Cl. Ct. 237, 240 (1984) (quoting Olsberg Excavating Co. v. United States, 3 Cl. Ct. 249, 251-52 (1983)). C. SRC'S PROTECTIVE APPEAL TO THIS COURT IS CONSISTENT WITH PRECEDENT AND THE PURPOSES OF THE CONTRACT DISPUTES ACT

SRC only filed this appeal when, almost at the jurisdictional limit (SRC's complaint was filed August 31, 2005, just prior to the one year deadline after its September 3, 2004 receipt of the final decisions), the jurisdictional question still had not yet been finally resolved. Nor does SRC look to unnecessarily increase either party's costs or to waste the time or economy of this Court. For that reason, SRC moved to stay this action pending final determination of the related ASBCA claims, which SRC submits remains warranted and appropriate under the facts and law, including this Court's precedent. This is not an issue of first impression. Similar cases include those noted elsewhere herein, and in particular the National Neighbors case, 839 F.2d 1539 (Fed. Cir. 1988). In response to a contractor's claim for reimbursement, the contracting officer sent a letter denying the claim; the letter indicated that the contractor could contest the contracting officer's decision by either supplying written notice to the Board within 90 days of receipt of the decision or bringing a direct action before the Claims Court within 12 months of receipt of the decision. 839 F.2d at 1541. The contractor subsequently notified the Board of its intent to appeal the decision, and thereafter filed an appeal with the Board. Id. A question then arose regarding whether the filing of the Board appeal was timely. Id. Just prior to the 12-month deadline, the contractor "filed a complaint in the Claims Court `to protect [its] rights in the event that the [Board] determines that [the contractor's] appeal ... was untimely filed.'" Id. (emphasis added).

5

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 6 of 14

Prior to the Board making a determination regarding whether it had jurisdiction over the claim, the Claims Court dismissed the complaint filed with the Court based on its interpretation of the Election Doctrine. Id. The contractor appealed the Claims Court's decision to the Court of Appeals for the Federal Circuit. On appeal the Federal Circuit summarized the holdings of the Cosmic Construction and Olsberg Excavating decisions as follows: The Claims Court, in these cases, held that the mere filing by a contractor of an appeal with the appropriate board of contract appeals was not a binding election, as contemplated by the Contract Disputes Act, and did not bar the subsequent filing of a claim with the Claims Court if it was determined by the board that the contractor's appeal to the board was untimely. ... Accordingly, a contractor's choice to pursue an appeal in a forum lacking jurisdiction is not a binding election. Id. at 1542. The Federal Circuit then went on to hold that the lack of a jurisdictional determination by the Board made the Claims Court's dismissal for lack of jurisdiction premature, holding: Because, at the time the Claims Court dismissed for lack of jurisdiction [the contractor's] complaint, the board had not determined whether it had jurisdiction over [the contractor's] appeal, we hold that the proceeding before the Claims Court was not ripe for the Claims Court to dismiss [the contractor's] complaint pursuant to the Contract Disputes Act on grounds that [the contractor] had made a binding election under the Election Doctrine by appealing to the board the contracting officer's adverse decision. Id. at 1543. In so holding the Court pointed out that only after the Board made a jurisdictional determination could the Claims Court properly act on a motion to dismiss the court complaint. Id. Thereafter, if the Board found that the Board claim was untimely, the contractor could pursue the claim it filed with the court (provided the court claim was timely filed); alternatively, if the Board found that the Board claim was timely, "the proceeding before the Claims Court will be ripe for the Claims Court properly to dismiss pursuant to the Contract Disputes Act [the

6

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 7 of 14

contractor's] complaint for lack of jurisdiction." Id. The Court then summarized its decision as follows: [A]n untimely appeal to the board is not a binding election under the Election Doctrine and will not preclude a contractor from pursuing a timely suit in the Claims Court. Here, there has been no determination that the appeal before the board is timely and that the board has jurisdiction over the appeal. The statutory choice is to appeal the decision of the contracting officer, i.e., to pursue that claim in one forum in lieu of another. The mere filing of a document, which does not mature into a "proceeding" on the merits, is not a viable election pursuant to the statute. Prior to the board determining whether [the contractor's] appeal is timely and that the board has jurisdiction and can resolve the dispute, it is not possible to determine under the Election Doctrine whether [the contractor] has made a binding election to choose the board for resolution of its dispute with the contracting officer, by appealing to the board. On this basis, we conclude that the proceeding before the Claims Court was not ripe for the Claims Court to dismiss [the contractor's] complaint. Id. (emphasis in original). As demonstrated in National Neighbors, the contractor's filing of a protective appeal with the court in light of the impending deadline and the lack of a Board determination regarding jurisdiction was wholly appropriate. That holding does not stand alone and has been followed by other tribunals too. For instance, as pointed out by the General Services Board of Contract Appeals (GSBCA): [D]uring the time that the jurisdictional question had been raised, but not decided, by us, appellant was at all times free to protect itself against a decision that we do not have jurisdiction over the appeal. Appellant could have secured this protection by filing with the Claims Court a timely lawsuit involving the same matters. Had appellant done so, that court could not have dismissed the case for lack of jurisdiction unless we had determined that we have jurisdiction over the appeal. Appeal of U.S. West Info. Sys., Inc., 88-3 BCA ¶ 20952, GSBCA No. 9175 (citing National Neighbors, 839 F.2d at 1543). The same precepts hold true with SRC's protective appeal, which

7

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 8 of 14

should not be dismissed, and which rather should be stayed pending final determination of the Board's jurisdiction. III. CONCLUSION The Government's motion to dismiss misapplies the facts and the law. The ASBSC has not ruled on jurisdiction, and regardless the propriety of SRC's protective appeal to this Court is recognized precedent. Accordingly, the Government's motion should be denied, and for similar reasons this Court should grant SRC's motion to stay, granting SRC such other and further relief as the Court finds appropriate to these motions and this cause.

Done this date: January 24, 2006 STATES ROOFING CORPORATION /s/Neil S. Lowenstein By: _______________________________________ Of Counsel Neil S. Lowenstein Email: [email protected] David W. Lannetti Email: [email protected] VANDEVENTER BLACK LLP 500 World Trade Center Norfolk, VA 23510 (757) 446-8610 (757) 446-8670 (facsimile) CERTIFICATE OF SERVICE I certify that this day the original or a true copy of the foregoing pleading was served in accordance with Rule 5.1 via electronic service to counsel of record for the Government herein using the information furnished by defendant in the court's electronic filing system. Copy was also furnished this day by electronic mail to Government counsel in the ASBCA appeals, David L. Koman to the following email address: [email protected]. Done this date: 1/23/06 /s/Neil S. Lowenstein Counsel for Plaintiff

8

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 9 of 14

EXHIBIT A

9

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 10 of 14

10

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 11 of 14

11

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 12 of 14

12

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 13 of 14

13

Case 1:05-cv-00960-LJB

Document 9

Filed 01/24/2006

Page 14 of 14

14