BAE Sys. Land & Armaments L.P. v. Ibis Tek, LLC
Decision Date | 19 August 2015 |
Docket Number | Civil No. 14–cv–3111 (MJD/TNL). |
Citation | 124 F.Supp.3d 878 |
Parties | BAE SYSTEMS LAND & ARMAMENTS L.P., Plaintiff, v. IBIS TEK, LLC, Defendant. |
Court | U.S. District Court — District of Minnesota |
Barbara A. Duncombe, Suzanne Sumner, William Charles Wagner, Taft Stettinius & Hollister LLP, Dayton, OH, Mark J. Blando, Jeff H. Eckland, Eckland & Blando LLP, Minneapolis, MN, for Plaintiff.
John G. Horan, Dentons US, Washington, DC, Sonia L. Miller–Van Oort, Sapientia Law Group, Minneapolis, MN, Dara D. Mann, McKenna Long & Aldridge LLP, Atlanta, GA, for Defendant.
Based upon the Report and Recommendation by United States Magistrate Judge Tony N. Leung dated July 30, 2015 (ECF No. 58), along with all the files and records, and no objections to said Recommendation having been filed, IT IS HEREBY ORDERED that Defendant's Motion to Transfer, or Alternatively, to Stay Proceedings (ECF No. 26) is DENIED.
This matter comes before the Court, United States Magistrate Judge Tony N. Leung, on Defendant's Motion to Transfer, or Alternatively, to Stay the Proceedings (ECF No. 26). This motion has been referred to the undersigned for a report and recommendation to the district court, the Honorable Michael J. Davis, District Judge for the United States District Court for the District of Minnesota, under 28 U.S.C. § 636 and D. Minn. LR 72.1. (ECF No. 31.)
A hearing was held. Jeff H. Eckland of Eckland & Blando LLP appeared on behalf of Plaintiff BAE Systems Land & Armaments L.P. ("BAE"). Sonia L. Miller–Van Oort of Sapientia Law Group and Justin M. Ganderson of McKenna Long & Aldridge LLP1 appeared on behalf of Defendant Ibis Tek LLC ("Ibis Tek").
Based upon the record, memoranda, and the proceedings herein, IT IS HEREBY RECOMMENDED that the Motion to Transfer, or Alternatively, to Stay the Proceedings (ECF No. 26) BE DENIED.
This is an action for breach of a subcontract between BAE and Ibis Tek. (Am. Compl. ¶¶ 3, 6, ECF No. 9.) Under the subcontract, Ibis Tek was to supply window assemblies and window kits in support of a contract BAE had entered into with the Army. (Am.Compl. ¶¶ 5, 6.) Section H of the subcontract contained "Special Terms and Conditions Applicable to Certain Orders Under Government Contracts" ("Special Terms and Conditions"). (Ex. 2 to Am. Compl. at 2.014, 2.030–.032, ECF No. 9–2.) Among other things, the Special Terms and Conditions addressed cost and pricing data. (See Ex. 2 at 2.030–.031.)
(Ex. 2 at 2.031; see Am.Compl. ¶ 8.) "In conjunction with its proposal, Ibis Tek submitted cost or pricing data and signed a Certificate of Current Cost or Pricing Data as of August 16, 2007." (Am.Compl. ¶ 10.)
Subsequently, the Defense Contract Audit Agency ("DCAA") "examined Ibis Tek's cost or pricing data related to initial pricing of the [s]ubcontract." (Am.Compl. ¶ 11.) The DCAA "determined that Ibis Tek overstated material, material handling, labor and overhead, and general and administrative costs as a result of its failure to submit accurate, complete, and current cost or pricing data." (Am.Compl. ¶ 13.) In a separate report, the DCAA "determined that BAE ... overstated the negotiated subcontract costs as a direct result of Ibis Tek's failure to submit current, accurate, and complete data to the Government." (Am.Compl. ¶ 15.) Ibis Tek challenged the DCAA's findings. (Am.Compl. ¶ 13.)
Ultimately, a revised demand letter was issued to BAE by the Army Contracting Officer for the Prime Contract ("Army Contracting Officer"). (Am.Compl. ¶¶ 16, 17.) (Am.Compl. ¶ 17.)
Because Ibis Tek was not in privity with the Army, Ibis Tek was not able to challenge the finding that it had submitted cost or pricing data that was not current, accurate, and complete with the Army Contracting Officer directly. (Am.Compl. ¶ 18.) BAE and Ibis Tek entered into a Sponsorship Agreement "for the purpose of allowing Ibis Tek to challenge" the cost-or-pricing-data finding. (Am.Compl. ¶ 18.) On behalf of Ibis Tek, BAE filed a claim with "the Army Contracting Officer challenging the Government's price adjustment and demand of $2,740,910.27 for the alleged defective pricing." (Am.Compl. ¶ 19.) The Army Contracting Officer denied the claim and the approximately $2.7 million was ultimately recouped by offset against other payments the Government owed to BAE. (Am.Compl. ¶¶ 21, 26.)
In a series of communications, BAE informed Ibis Tek that the claim had been denied and requested that Ibis Tek pay BAE the approximately $2.7 million under the terms of the subcontract. (Am.Compl. ¶ 22.) BAE requested that Ibis Tek advise whether it planned to appeal the Army Contracting Officer's denial and to provide payment plan. (Am.Compl. ¶¶ 24, 27.) Ibis Tek eventually indicated that it planned to appeal the denial with the Armed Services Board of Contract Appeals and proposed a payment plan. Unsatisfied with Ibis Tek's response, BAE filed the instant action for breach of the subcontract. (See Am. Compl. ¶¶ 29–39.) Based on a November 18, 2014 opinion by the Armed Services Board of Contract Appeals provided to the Court at the hearing, the appeals process has commenced.
Ibis Tek has now moved that this matter be transferred to the United States District Court for the Western District of Pennsylvania pursuant to 28 U.S.C. § 1404(a), or in the alternative, stayed until resolution of the appeal before the Armed Services Board of Contract Appeals.
"For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought...." 28 U.S.C. § 1404(a). Valspar Corp. v. Kronos Worldwide, Inc., 50 F.Supp.3d 1152, 1155 (D.Minn.2014) (quotation omitted). When considering Dial Tech., LLC v. Bright House Networks, LLC, No. 13–cv–2995 (MJD/TNL), 2014 WL 4163124, at *8 (D.Minn. Aug. 21, 2014) (citing cases).
Ibis Tek is a Pennsylvania limited liability company with its principal place of business in Butler, Pennsylvania. Butler is located in Butler County, which is in the Western District of Pennsylvania. See County of Butler Web Map Viewer, Butler County, http://maps.co.butler.pa.us/ (last accessed July 27, 2015); Western District of Pennsylvania Area of Service, U.S. Marshals Service, http://www.usmarshals.gov/district/pa-w/general/area.htm (last accessed July 27, 2015). BAE does not appear to dispute that this action could have been brought in the Western District of Pennsylvania and, as a result, the Court proceeds to whether the relevant factors favor transfer under § 1404(a). See Klatte v. Buckman, Buckman & Reid, Inc., 995 F.Supp.2d 951, 955 (D.Minn.2014).
"[A] transfer motion requires the court to consider the convenience of the parties, the convenience of the witnesses, the interests of justice, and any other relevant factors when comparing alternative venues." Terra Int'l Inc. v. Miss. Chem. Corp., 119 F.3d 688, 696 (8th Cir.), cert. denied, 522 U.S. 1029, 118 S.Ct. 629, 139 L.Ed.2d 609 (1997) ; accord Dial Tech., 2014 WL 4163124, at *8 ; Clergy Fin., LLC v. Clergy Fin. Servs., Inc., 598 F.Supp.2d 989, 995 (D.Minn.2009). The Eighth Circuit has "declined to offer an exhaustive list of specific factors to consider in making the transfer determination, but [has instructed] district courts [to] weigh any case-specific factors relevant to convenience and fairness to determine whether transfer is warranted." In re Apple, Inc., 602 F.3d 909, 912 (8th Cir.2010) (per curiam) (quotations and citation omitted); accord Toomey v. Dahl, 63 F.Supp.3d 982, 993 (D.Minn.2014) ; Dial Tech., 2014 WL 4163124, at *8 ; see Valspar Corp., 50 F.Supp.3d at 1155. "There is no precise mathematical formula to be employed, and a district court enjoys ‘much discretion’ when deciding whether to grant a motion to transfer." Valspar Corp., 50 F.Supp.3d at 1155 (quoting Terra Int'l, 119 F.3d at 697 ).
"Courts must be cognizant, however, that transfer motions should not be freely granted." Id. (quotation omitted); accord Dial Tech., 2014 WL 4163124, at *9. "[F]ederal courts give considerable deference to a plaintiff's choice of forum." Terra Int'l, 119 F.3d at 695. ...
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