Bellsouth Telecommunications, Inc. v. U.S.
| Decision Date | 19 September 1996 |
| Docket Number | No. 3:95-CV-0306.,3:95-CV-0306. |
| Citation | 991 F.Supp. 920 |
| Parties | BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff, v. UNITED STATES of America, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
W. Clark Meredith, Flitcroft & Normand, Oak Ridge, TN, for plaintiff.
John T. Buckingham, U.S. Department of Justice, Office of U.S. Attorney, Knoxville, TN; Edwin H. Rayson, Jr., and William P Snyder, Kramer, Rayson, Leake, Rodgers & Morgan, Knoxville, TN; G. Wilson Horde, and Ann M. Ward, Lockheed Martin Energy Systems, Inc., Oak Ridge, TN; Thomas A. Williams, and F. Scott LeRoy, Leitner, Williams, Dooley and Napolitan, Chattanooga, TN; Celeste Huffman Herbert, and Bernard E. Bernstein, Bernstein, Stair & McAdams, Knoxville, TN, for defendants.
This civil action is before the court for consideration of several motions which address directly or indirectly the issue whether the plaintiff may sue the United States in this court for any relief in this civil action. The court heard oral argument on the various defendants' motions on Friday, September 13, 1996, and is now prepared to rule on the motions.
To examine the background out of which this litigation arises, it is necessary to look not only to the plaintiff's complaint [doc. 1] as amended [doc. 47], but also to other materials in the court's file, including especially the exhibits to the brief [doc. 30] filed by the defendants Martin Marietta Energy Systems, Inc.1 (Energy Systems), and J.W. Hatfield (Hatfield) in support of their motion [doc. 29] to dismiss the plaintiff's claims against them in this civil action. The plaintiff BellSouth Telecommunications, Inc., doing business as South Central Bell Telephone Company2 (BellSouth), entered into a contract in 1977 with the United States (, with the Energy Research and Development Administration (ERDA), the predecessor agency of the Department of Energy (DOE)) to install and provide specified telecommunications facilities and services (the ERDA Telecommunications System). This 1977 contract contained a government contract disputes article, which required the submission of "any dispute concerning a question of fact arising under this contract which is not disposed of by agreement" to a contracting officer in the first instance, followed by appeal to the Administrator of ERDA.
In 1979, BellSouth and DOE entered into a memorandum of understanding concerning "joint underground conduit system occupancy" at DOE's three Oak Ridge sites, Y-12, X-10 (also known as Oak Ridge National Laboratory or ORNL), and K-25 (also known as The Oak Ridge Gaseous Diffusion Plant). The section of this memorandum of understanding entitled "GENERAL" gives an idea of the subject matter of the memorandum:
This memorandum of understanding covers the installation and maintenance of cables by (DOE) and/or its assigned agents in the underground conduit and manholes installed by [BellSouth] within the D.O.E. Y-12 area, Oak Ridge National Laboratory (X-10) and The Oak Ridge Gaseous Diffusion Plant (K-25) at Oak Ridge, Tennessee.
The conduit systems installed in these plant areas contain varying numbers of ducts reserved for use by the D.O.E. and [BellSouth]. The ducts reserved for each party share manholes provided for access to the conduit system....
It is the intent of this memorandum to outline an understanding between D.O.E. and [BellSouth] relative to the occupancy of the ducts provided for use by D.O.E. in the joint system.
In February 1987, the United States, BellSouth, and Energy Systems entered into an assignment and novation agreement, under which DOE assigned its 1977 contract with BellSouth to Energy Systems, and BellSouth and Energy Systems agreed to modify the contract to classify it as a subcontract, in light of the fact that Energy Systems had entered into the principal contract to manage and operate most of DOE's facilities in Oak Ridge, Tennessee. It was agreed in this assignment and novation agreement that "[t]he rights and obligations of [BellSouth] under [the contract] are in no way altered by this assignment except for the substitution of Energy Systems for DOE as party to the contract." This was followed, in March 1987, by supplemental agreement no. 1 to the subcontract, which added a TITLE AND ADMINISTRATION paragraph which reads,
It is understood and agreed that this subcontract is entered into by the Company for and on behalf of the Government; that title to all supplies furnished hereunder by the Seller shall pass directly from the Seller to the Government, as purchaser, at the point of delivery; that the Company is authorized to and will make payment hereunder from Government funds advanced and agreed to be advanced to it by DOE, and not from its own assets, and administer this subcontract in other respects for DOE, unless specifically provided for herein; that administration of this subcontract may be transferred from the Company to DOE or its designee, and in case of such transfer and notice thereof to the Seller, the Company shall have no further responsibilities hereunder; and that nothing herein shall preclude liability of the government for any payment properly due hereunder if for any reason such payment is not made by the Company from such Government funds.
In 1989, according to the affidavit of Nick Alvaro of BellSouth, attached to the original complaint filed in this civil action, "DOE-Martin Marietta" requested BellSouth to deliver a copy of the drawings and plats of the telecommunications system in Oak Ridge and the plant site areas. The plaintiff provided these drawings and plats, marked "Not for use or disclosure outside the Bell system except by written agreement." The plaintiff alleges that "DOE-Martin Marietta" made these drawings and plats available to the defendant U.S. West Communications Federal Services, Inc. (U.S. West) to use "for the purpose of installing a new telecommunications system for DOE-Martin Marietta to replace South Central Bell's telecommunications system."
Energy Systems and BellSouth eventually agreed to terminate the subcontract derived from the 1977 contract in its entirety, effective April 1, 1990, and at no cost to Energy Systems or the United States. Energy Systems and BellSouth entered into a separate subcontract under which BellSouth agreed to provide ESSX service at DOE's Oak Ridge facilities for the period from April 1, 1990, through March 31, 1995. According to the United States in its initial brief filed in this civil action [doc. 19 at 5],
Modification G to Subcontract No. 63K-XG367V ..., dated April 1, 1992, extended the period of performance of that subcontract until September 30, 1996, with options for further extension to March 31, 1998. Subcontract No. 63K-XG367V, with its extension, is the contract which presently represents the agreement between [BellSouth] and Energy Systems regarding telecommunications services and facilities at the DOE Oak Ridge Operations facilities.
There is no dispute concerning these contracting facts in this civil action.
To understand why BellSouth ended up in this litigation with both the United States and Energy Systems, it is necessary to consider some of the factual allegations in Bell-South's amended complaint, at 4-6:
South Central Bell has, for over 40 years, installed, maintained, and provided telecommunications facilities and services for use by DOE and its contractors at the Oak Ridge Operations Offices in Anderson and Ridge Counties, Tennessee. Miles of underground ducts, conduit and cables belonging to South Central Bell have been constructed and upgraded by South Central Bell over these many years and integrated into the entire South Central Bell system servicing the residential and commercial communities of Oak Ridge and Knoxville, Tennessee....
Starting in 1994 and continuing to date, the Government, through DOE, has placed U.S. West as a contractor on site to install and administer a telecommunications system within the governmental facility at Oak Ridge....
In late June or early July, 1994, South Central Bell learned... that U.S. West and/or Tel-Tec [US West's subcontractor] intended to access and intrude upon South Central Bell's telecommunications equipment and cables, without obtaining prior consent from South Central Bell.
Once BellSouth learned of this intention to "access and intrude upon" the telecommunications equipment and cables on and under DOE's three Oak Ridge sites, various communications traveled among the interested parties. On July 5, 1994, BellSouth advised U.S. West that BellSouth had learned that U.S. West intended to test existing telephone cables at the Oak Ridge sites to determine their suitability for purchase, and stated that certain cables on the sites were the property of BellSouth, "and unauthorized parties are not allowed to access the working or idle cables in any way." There followed correspondence between Energy Systems and BellSouth in which these parties disputed ownership of certain equipment and facilities installed on the Oak Ridge sites as part of the telecommunications system, with Energy Systems asserting that "the original contract... and subsequent novation, clearly state that title to property vests with the government when used in performance of the contract or when [Energy Systems] pays for it, whichever occurs first."
In this civil action, the plaintiff states multiple theories of recovery. BellSouth pleads causes of action under Tennessee law for wrongful trespass and/or conversion against the defendants U.S. West and Tel-Tec, Inc. (Tel-Tec), U.S. West's subcontractor. Against these defendants and the defendant Energy Systems, BellSouth states a cause of action under Tennessee law, Tennessee Code Annotated § 47-50-109, for tortious interference with its contracts with some of its other customers, arising out of alleged interference with its maintenance of cables and other facilities on and...
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