Free Response to Order to Show Cause - District Court of Federal Claims - federal

Case 1:98-cv-00543-ECH

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS GOLD LINE REFINING, LTD., ) through its trustee Ben B. Floyd, ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. )

No. 98-543 C (Judge Hewitt)

DEFENDANT'S RESPONSE TO THE COURT'S ORDER TO SHOW CAUSE WHY PROCEEDINGS IN THIS MATTER SHOULD NOT BE SUSPENDED By order issued February 20, 2004, the Court directed the parties to show cause why proceedings in this matter should not be suspended pending consideration by the court of appeals of two cases involving legal issues substantially similar to the issues presented by plaintiff's ("Gold Line") complaint in this case. Defendant respectfully responds that proceedings in this matter should be suspended, and we respectfully request the Court to suspend proceedings. Gold Line will oppose suspension.

As the Court recognized in its order to show cause, on February 2, 2004, the United States Court of Appeals for the Federal Circuit granted interlocutory appeals from two decisions by this Court, Tesoro Hawaii Corporation v. United States , 58 Fed. Cl. 65 (2003), and Hermes Consolidated, Incorporated v. United States, 58 Fed. Cl. 409 (2003). The cases have been

consolidated for consideration by the court of appeals, Tesoro Hawaii Corporation v. United States , No. 04-5064 (Fed. Cir.). Tesoro and Hermes are cases that are similar to this case by Gold Line. The plaintiffs in all three cases challenge whether an

economic price adjustment clause contained in Government

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contracts for fuel was properly included in their contracts, and the Government in all three cases has asserted that the clause was properly included in the contracts and that, in any event, plaintiffs had waived any ability to pursue a challenge to the clause. These controlling issues of propriety and waiver will be

considered by the court of appeals in Tesoro, and the court's decision will directly affect further proceedings in this case. Given that these controlling issues are currently being considered by the court of appeals, further proceedings in this case are not likely to be productive, having a substantial likelihood of failing to address necessary issues or causing the parties and the Court to expend scarce resources and time upon issues that are unnecessary to proper resolution of the case. fact, a decision by the court of appeals in favor of the Government upon either propriety or waiver may lead to the dismissal of some or all of the counts of Gold Line's complaint and, in any event, would drastically alter any further proceedings in this case. In this circumstance, conducting any In

further proceedings would be contrary to Rule 1 of this Court, which requires that the rules of the Court be construed and administered to secure efficient and inexpensive determination of the action. Rule 1 requires also the speedy determination of the action, and Gold Line's only argument against suspension at this time is to highlight the maturity of this case and the substantial progress that the parties have made in preparing this case for
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trial.

Although the case is relatively mature and the parties

have made substantial progress toward preparing the case for trial, the possibility that much of the work that has been done and any work that may be done without waiting for the guidance of the court of appeals could be an unnecessary waste of the scarce time and resources of the parties and the Court overshadows any idea of pressing forward in the hope that the work will not be wasted. Performing potentially wasted work will not provide a Waiting for the court of appeals

quicker resolution of the case.

to rule in Tesoro will improve the efficiency and control the costs of these proceedings. Confronted with these same circumstances and based upon this same reasoning, the proceedings in the following similar cases pending before the Court have been suspended pending a decision by the court of appeals in Tesoro:1 Sinclair Oil Corp. v. United

States, 02-464C (Judge Baskir Nov. 19, 2003); Kern Oil & Refining Co. v. United States, 03-1623C (Judge Sypolt Dec. 17, 2003 (trans. to Judge G. Miller)); Calcasieu Refining Co. v. United States, 02-1219C (Judge C. Miller Feb. 6, 2004); Valero Refining ­ Texas, L. P. v. United States , 03-1916C (Judge Firestone Feb. 18, 2004); Western Refining Company, L. P. v. United States , 032669C (Judge Firestone Feb. 18, 2004); ATOFINA Petrochemicals, Inc. v. United States, 03-538C (Judge G. Miller Feb. 24, 2004); Giant Industries, Inc. v. United States , 03-291C (Judge G. Miller

While working on Hermes, Judge Block suspended proceedings in El Paso Merchant Energy ­ Petroleum Company v. United States, 02-1094C (Aug. 18, 2003).
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Feb. 24, 2004); Williams Alaska Petroleum, Inc. v. United States , 02-705C (Judge Wiese Feb. 10, 2004 bench ruling); 2 Phoenix Petroleum Co. v. United States , 97-315C (Judge Margolis March 3, 2004); Sunoco, Inc. v. United States , 02-466C (Chief Judge Damich March 5, 2003). 3 Finally, although the parties disagree as to whether the proceedings should be suspended, the parties agree that if the Court suspends proceedings that the parties should be allowed so far as they can agree to conclude currently pending document discovery. For these reasons, we respectfully request the Court to suspend further proceedings pending a final decision by the court of appeals in Tesoro Hawaii Corporation v. United States , No. 045064 (Fed. Cir.), except to the extent that the parties can agree with regard to concluding currently pending document discovery. Respectfully submitted, PETER D. KEISLER Assistant Attorney General s/David M. Cohen DAVID M. COHEN Director

Judge Wiese had previously suspended proceedings in the following cases pending resolution of Williams Alaska: Exxon Mobil Corp. v. United States , 02-1217C; Conoco Phillips v. United States, 02-1367C; Placid Holding Company v. United States , 031216C. Chief Judge Damich had previously suspended proceedings in the following cases pending a decision in Sunoco: Chevron Texaco v. United States, 03-288C; Marathon Ashland Corp. v. United States, 02-1218C.
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OF COUNSEL: BERNARD A. DUVAL Counsel HOWARD KAUFER Assistant Counsel Office of Counsel Defense Energy Support Center Fort Belvoir, VA

s/ Reginald T. Blades, Jr. REGINALD T. BLADES, JR. Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Telephone: (202) 514-7300 Facsimile: (202) 307-0972 Attorneys for Defendant

March 12, 2004

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CERTIFICATE OF SERVICE I hereby certify that on this 12th day of March, 2004, a copy of the foregoing document, "DEFENDANT'S RESPONSE TO THE COURT'S ORDER TO SHOW CAUSE WHY PROCEEDINGS IN THIS MATTER SHOULD NOT BE SUSPENDED", 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. filing through the Court's system. Parties may access this

s/ Reginald T. Blades, Jr.