Am. Ground Transp. v. United States
| Docket Number | 20-123C |
| Decision Date | 26 May 2023 |
| Parties | AMERICAN GROUND TRANSPORTATION, INC. and LIBERTY LAUNCH, INC., Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Maryann Cazzell, Cazzell & Associates, California, for plaintiffs.
Joshua A. Mandlebaum, Trial Attorney, Commercial Litigation Branch Civil Division, Department of Justice, Washington, D.C., for defendant.
This case concerns a concession contract formerly held by plaintiffs to provide shuttle services on a military base. Plaintiffs' complaint alleges that the United States violated this contract and breached the duty of good faith and fair dealing when the government permitted competitors to operate on base and to commit various torts against plaintiffs. Plaintiffs also maintain that the United States' actions constitute intentional interference with prospective economic relations, negligent interference with prospective economic relations, and ordinary negligence. Plaintiffs seek damages for all these alleged harms, subject to proof as to amount.
Currently before the Court is the government's motion to dismiss the case.
Also pending is plaintiffs' motion to strike one of the government's exhibits.[1]
The matter is now ripe for disposition.
Plaintiffs American Ground Transportation (American Ground) and its subcontractor Liberty Launch, Inc. (Liberty) (together plaintiffs or the Concessionaires) held a concession contract to provide base-wide shuttle service at Camp Pendleton, CA (the Base). The Marine Corps Community Services (the Agency), a nonappropriated fund instrumentality of the United States, awarded this contract on December 13, 2010, after a competitive bidding process. Second Amend. Compl. (Compl.), ECF No. 38, ¶ 21. The contract was to last for five years, with the Agency holding the unilateral option to extend for up to five additional one-year terms. Ex. 1 to Def.'s Mot. (Contract), ECF No. 39-1, at 1, 19. Plaintiffs replaced the previous concessionaire, SeaBreeze, after a period with no contractor. Compl. ¶ 28. At the conclusion of the contract term, on December 31, 2015, the Agency notified plaintiffs that it would not renew and would not award any concession contract for these services in the future. Letter, Ex. 3 to Def.'s Mot., ECF No. 39-2. The Agency, however, extended the contract until January 24, 2016, to give the Concessionaires time to discontinue operations and leave the Base. Id.
Under the terms of the contract, the Agency agreed to "provide the operational space to [American Ground] that is empty and without trade fixtures or furniture," to assist with "marketing and advertising" at plaintiffs' expense, and to coordinate with them about routes, hours of operation, and similar logistics. Contract at 1, 10. In consideration, the Concessionaires paid a monthly commission on sales and a monthly fee for the upkeep of each "location in shopping centers, parking lots, etc. assigned and occupied as a fixed management or operations site." Id. at 6, 9, 19. "In the event office or operational building spaces are provided," the Concessionaires had additional repair obligations. Id. at 18.
The contract also contained a provision in Attachment A, labeled "Non-Exclusivity Contract." Id. at 47; see also id. at 1 (). This provision declares that that "[u]nless specified elsewhere, this contract does not establish Contractor as the sole supplier of goods or services to be provided on this military installation."[2] Two merger clauses also appear in the contract, stating that the written provisions and five attachments together "constitute the entire agreement" between the government and the Concessionaires. Id. at 19-20. Both parties concede that the contract is fully integrated. See Def.'s Reply, ECF No. 41, at 8; Pls.' Mot., at 4.
During the five years of the Concessionaires' incumbency, SeaBreeze---along with other shuttle services---continued to operate on base and used the same pick-up and drop-off locations as the Concessionaires. See Compl. ¶¶ 28-29. Neither party alleges that SeaBreeze is an agent of the United States.
On June 13, 2017, the Concessionaires were banned from the Base via a separate disciplinary process. They also lost their RapidGate passes at that time. See Compl. ¶ 41; Pls.' Opp'n, ECF No. 40, at 33.
After exhausting administrative remedies, the Concessionaires filed a complaint in the United States District Court for the Southern District of California on March 21, 2019. Compl. ¶¶ 4, 42-43. On October 15, 2019, the district partially dismissed the case and transferred the remaining portion to this Court. ECF No. 21. While a motion to dismiss the case was pending, the Concessionaires moved for leave to file a Second Amended Complaint, and that motion was granted. ECF Nos. 33-35. The government moved to dismiss the case, the Concessionaires responded, and the government replied in support of its motion. ECF Nos. 39-41.
The Second Amended Complaint alleges that the United States breached its agreement by allowing SeaBreeze to operate on base during the Concessionaires' incumbency. It also maintains that SeaBreeze committed multiple torts against plaintiffs, and that the Agency further breached the contract by not preventing those third-party torts. The complaint also alleges that the Agency violated the implied duty of good faith and fair dealing through its actions. Id. ¶¶ 54-57.
The earlier Transfer Complaint, in comparison, suggested that the Agency also breached an implied-in-fact contract that existed after the explicit contract ended. See Transfer Compl., ECF No. 27, ¶ 28. This argument does not appear in the Second Amended Complaint, but the Concessionaires' opposition to the motion to dismiss develops the same theory. The Concessionaires allege that the Agency allowed continued performance as if under the contract even though the Agency neither renewed nor insisted upon payment of the monthly commissions. See generally Pls.' Opp'n at 28-33.
The government maintains that the contract did not provide for exclusivity, Def.'s Mot. at 14-16, that SeaBreeze's alleged torts cannot be attributed to the Agency, id. at 17-19, and that the United States is therefore not liable for these torts. As for the implied-in-fact contract, the United States maintains that there was no continued performance as under the contract. See Def.'s Reply at 11-13. Finally, the government points out that the implied duty of good faith and fair dealing cannot create new obligations and must be keyed to the promises in the contract. Because the Concessionaires cannot point to specific promises that were allegedly undermined, says the government, it cannot plausibly allege a breach of the duty. Def.'s Mot. at 22-24.
On August 21, 2021, defendant filed a supplemental brief in support of its motion to dismiss. Def.'s Supp. Br., ECF No. 49. To this brief, the government attached a Declaration of Richard A. Scott. Scott Dec., Ex. 1 to Def.'s Supp. Br., ECF No. 49-1. A week later, plaintiffs filed document entitled "Objections to Evidence," challenging the Scott Declaration on various admissibility grounds, including the personal knowledge requirement, the authentication requirement, and the best evidence rule. Pl.'s Mot. at 1, 3, 10-11, 13; see also Fed. R. Evid. 602, 901, 1002. The Court has construed this document as a motion to strike portions of the Scott Declaration. Order, ECF No. 51. Plaintiffs themselves now refer to that filing as "motion to strike" that was previously "filed as 'objections to evidence'." Pls.' Reply, at 1.
Under the Rules of the United States Court of Federal Claims (RCFC), this Court must dismiss claims that do not fall within its subject-matter jurisdiction. RCFC 12(b)(1). When considering a motion to dismiss a case for lack of subject-matter jurisdiction, the Court generally accepts all factual allegations by the non-movant and draws all reasonable inferences in the light most favorable to that party. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Pixton v. B&B Plastics, Inc., 291 F.3d 1324, 1326 (Fed. Cir. 2002) (); CBY Design Builders v. United States, 105 Fed.Cl. 303, 325 (2012).
ii. Failure to State a Claim, RCFC 12(b)(6)
Cases that fall within the Court's jurisdiction must still be dismissed if they fail to state a claim on which the Court can grant relief. See RCFC 12(b)(6). Notably, "[w]hen considering a motion to dismiss a case for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a court accepts all well-pled facts as true and draws all reasonable inferences in plaintiff's favor." Silver Buckle Mines, Inc. v. United States, 117 Fed.Cl. 786, 791 (2014) (citing Scheuer, 416 U.S. at 236; Pixton, 291 F.3d at 1326; Englewood Terrace Ltd. P'ship v. United States, 61 Fed.Cl. 583, 584 (2004)). Granting a motion to dismiss a case for failure to state a claim "is appropriate when the facts asserted by the claimant do not entitle him to a legal remedy." Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). Denial of the motion is warranted when the complaint presents "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007...
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