Omicron Safety & Risk Techs., Inc. v. UChicago Argonne, LLC, No. 14 C 2761

• Court: United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
• Writing for the Court: Elaine E. Bucklo, United States District Judge
• Citation: 181 F.Supp.3d 508
• Parties: Omicron Safety and Risk Technologies, Inc., Plaintiff, v. UChicago Argonne, LLC, Defendant.
• Docket Number: No. 14 C 2761
• Decision Date: 06 March 2015

181 F.Supp.3d 508

Omicron Safety and Risk Technologies, Inc., Plaintiff,
v.
UChicago Argonne, LLC, Defendant.

No. 14 C 2761

United States District Court, N.D. Illinois, Eastern Division.

Signed March 6, 2015

181 F.Supp.3d 509

Jessica Lynn Heckinger, Robert D. Nachman, Barack Ferrazano Kirschbaum & Nagelberg LLP, Chicago, IL, John C. Person, Person & Craver LLP, Washington, DC, for Plaintiff.

Matthew Charles Crowl, Diana Bowman, Kenneth Mark Roberts, Kevin Lee Kolton, Schiff Hardin LLP, Chicago, IL, Michael Benedict Anastasio, UChicago Argonne, LLC, Lemont, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Elaine E. Bucklo, United States District Judge

UChicago Argonne, LLC ("UChicago Argonne") has moved to dismiss this breach of contract action on the ground that Omicron Safety and Risk Technologies, Inc.'s ("Omicron") claims are barred by anti-assignment and waiver provisions in the underlying contracts. I deny UChicago Argonne's motion to dismiss for the reasons stated below.

I.

At the motion to dismiss stage, I must accept Omicron's factual allegations as true. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

UChicago Argonne operates the Argonne National Laboratory ("ANL") in Lemont, Illinois pursuant to a contract with the U.S. Department of Energy. Dkt. No. 1 ("Compl.") at ¶ 2. The ANL campus includes an Intense Pulsed Neutron Source ("IPNS") facility that was used to conduct neutron scattering research until Congress defunded its operations in January 2008. Id. at ¶¶ 11–15. The IPNS facility is presently in a "safe shutdown mode." Id. at ¶ 15.

After operations ceased at the IPNS facility, UChicago Argonne issued a Request for Proposals ("RFP") to perform "characterization" work at the site. Id. at ¶ 7. In simple terms, characterization work involves ascertaining whether hazardous and radiological materials are present. Id. at ¶ 11. This information would inform UChicago Argonne's decision about how to decommission and demolish the IPNS facility. Id.

In August 2011, UChicago Argonne awarded a $2.16 million characterization services contract ("the Contract") to Omicron. Id. at ¶ 16. While performing the Contract, Omicron encountered "unforeseen field conditions" that UChicago Argonne had not disclosed when soliciting bids. Id. at ¶ 8. In particular, Omicron complains that it incurred cost overruns because the drilling/coring work was more difficult, costly, and time intensive than UChicago Argonne had represented in the RFP and other bidding documents. Id. at ¶¶ 7, 22–24.¹ Had UChicago Argonne disclosed

181 F.Supp.3d 510

the true nature of the required work at the bidding stage, Omicron says it would have "dramatically increased its cost estimate and corresponding bid price." Id. at ¶ 8.

In January 2012, five months before its final characterization report was due, Omicron sold all of its assets to Nuclear Safety Associates, Inc. ("NSA"). Id. at ¶ 16. In order to assign its interest in the Contract to NSA, Omicron needed to obtain UChicago Argonne's consent. See Dkt. No. 20–1 at Ex. 2, ¶ 34 ("Anti–Assignment Provision"). UChicago Argonne consented to the proposed assignment in a "Novation Agreement" signed at the same time as NSA's purchase of Omicron's assets. Id. at Ex. 1. In signing the Novation Agreement, Omicron waived the right to bring any claims against UChicago Argonne in connection with the Contract. Id. at ¶ (b)(1) ("Waiver Provision"). NSA, in turn, agreed to perform the Contract in accordance with its original terms, including the Anti–Assignment Provision. Id.

NSA subsequently assigned its rights under the Contract back to Omicron without UChicago Argonne's consent. Compl. at ¶ 16. Omicron has now filed suit against UChicago Argonne to recover almost $1.2 million in cost overruns under four separate breach of contract theories.

UChicago Argonne has moved to dismiss Omicron's complaint on the ground that it fails to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6).

II.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

Omicron's claims are facially implausible if, as UChicago Argonne contends, they are barred by the Anti–Assignment and/or Waiver Provision. The meaning of these provisions " ‘must be determined from the words or language used’ " without " ‘plac[ing] a construction on the contract which is contrary to the plain and obvious meaning of the language.’ " INEOS Polymers, Inc. v. BASF Catalysts, 553 F.3d 491, 498 (7th Cir.2009) (quoting McWane, Inc. v. Crow Chicago Indus., Inc., 224 F.3d 582, 584 (7th Cir.2000) ). If the provisions are unambiguous, I may determine their meaning as a matter of law at the motion to dismiss stage. Id.

The Contract provides that it shall be construed in accordance with the federal common law of contracts, to the extent such law exists on a particular interpretive question, or Illinois law. See Dkt. No. 20–1 at Ex. 2, ¶ 20.

A.

The Anti–Assignment Provision states: "Neither this contract nor any interest therein nor claim thereunder shall be assigned or transferred by the contractor except as expressly authorized in writing by the Laboratory." Dkt. No. 20–1 at Ex. 2, ¶ 34.

It is undisputed...