L-3 Servs., Inc. v. United States, 11-755C
| Decision Date | 15 March 2012 |
| Docket Number | No. 11-755C,11-755C |
| Parties | L-3 SERVICES, INC., AEROSPACE ELECTRONICS DIVSION, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Lack of subject matter jurisdiction; Maritime contracts; Maritime contract exception to Contract
Disputes Act jurisdiction, 41 U.S.C. § 7102(d); Bid protest over maritime contract distinguished (§ 861 of
National Defense Authorization Act for Fiscal Year 2012); Transfer under 28 U.S.C. § 1631
Roy A. Klein, Melville, NY, for plaintiff.
Armando A. Rodriguez-Feo, United States Department of Justice, Washington, D.C., with whom was Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Kirk T. Manhardt, Assistant Director, and Stephen D. Tobin, United States Department of the Navy, for defendant.
On November 11, 2011, plaintiff L-3 Services Inc., Aerospace Electronics Division, now L-3 Tactical Systems, Inc., ("plaintiff") filed this lawsuit pursuant to the Contract Disputes Act ("CDA"), 41 U.S.C. §§ 7101 et seq. (formerly 41 U.S.C. §§ 601 et seq. (2006)), alleging that defendant the United States ("the government") improperly refused to pay $3,232,949 owed to plaintiff under a contract for the modification of the Navy's Sea Fighter vessel. Pending before the court is the government's motion todismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"). In addition, if the court finds that it lacks subject matter jurisdiction, plaintiff requests that its case be transferred to the United States District Court for the District of Massachusetts in lieu of dismissal, pursuant to 28 U.S.C. § 1631. For the reasons discussed below, the court lacks subject matter jurisdiction over plaintiff's claims. The court TRANSFERS this case to the United States District Court for the District of Massachusetts.
The following facts are taken from plaintiff's complaint. On March 2, 2008, the United States Navy awarded plaintiff a contract for modifications and improvements to the Navy's Sea Fighter vessel, an experimental vessel that is the Navy's largest dedicated at-sea research and development test platform for science and technology projects. Compl. ¶¶ 5-6. Several modifications to the contract brought the contract value to $32,627,081. Id. ¶ 6. On March 23, 2010, the Navy de-funded the contract value by $3,262,708, reducing the contract value to $29,364,373. Id. ¶ 20. Plaintiff objected to the de-funding and demanded that the funds be reallocated, but on April 10, 2010, the Navy rejected this demand. Id. ¶¶ 20-21. After an attempt to resolve the matter, plaintiff submitted an invoice to the Navy for $3,232,949 (the amount that could be invoiced against the previously funded contract value, less a retainage of $25,000). Id. ¶ 26. On March 30, 2011, the Navy rejected this invoice. Id. ¶ 27.
As a result, on May 4, 2011, plaintiff submitted a certified claim to the government under to the CDA, 41 U.S.C. § 7103, to recover $3,232,949. Id. ¶ 31. OnJuly 5, 2011, the Navy rejected plaintiff's certified claim. Id. ¶ 32. Plaintiff then filed this suit on November 11, 2011, alleging that the Navy breached its contract with plaintiff by de-funding the contract and refusing to pay the sum specified in plaintiff's certified claim. Id. ¶ 34. Plaintiff also alleges that the Navy breached the implied covenant of good faith and fair dealing by capping funding of the contract, defunding the contract, and releasing funds appropriated to the contract and allocating them to an unrelated contract. Id. ¶ 40. Finally, plaintiff raises claims of quantum meruit, unjust enrichment, and fraud in the inducement. See id. at 13-15.
The government seeks to dismiss plaintiff's suit for lack of subject matter jurisdiction under RCFC 12(b)(1). The government argues that plaintiff's claims are "wholly maritime" and that under the applicable admiralty statutes, the Suits in Admiralty Act, 46 U.S.C. §§ 30901-30918, and the Public Vessels Act, 46 U.S.C. §§ 31101-31113, plaintiff's suit must be brought in federal district court. Def.'s Mot. at 4. Plaintiff argues that its claims are not maritime in nature because they arise from conduct separate from the performance of a maritime contract, and that therefore this court may hear its case under the CDA, 41 U.S.C. § 7104. Pl.'s Resp. at 8. Plaintiff also requests, should the court conclude that it lacks subject matter jurisdiction over plaintiff's claims, that the court transfer its case to the United States District Court for the District of Massachusetts. Id. at 9. The government opposes this request, arguing that plaintiff has ample time to file its action in district court. Def.'s Reply at 5-6. The court now turns to the parties' arguments.
Whether the court possesses jurisdiction to decide the merits of a case is a threshold matter. See PODS, Inc. v. Porta Stor, Inc., 484 F.3d 1359, 1365 (Fed. Cir. 2007) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998)). Because jurisdiction is a threshold matter, a case can proceed no further if a court lacks jurisdiction to hear it. See Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006) . The plaintiff bears the burden of establishing subject matter jurisdiction and must do so by a preponderance of the evidence. M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010) (citing Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988)). When a party has moved to dismiss for lack of subject matter jurisdiction, the alleged facts in the complaint are viewed as true. Pixton v. B & B Plastics, Inc., 291 F.3d 1324, 1326 (Fed. Cir. 2002) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
Under 28 U.S.C. § 1631, a federal court may transfer an action to another federal court when (1) the transferring court lacks subject matter jurisdiction; (2) the action could have been brought in the transferee court at the time it was filed; and (3) such a transfer is in the interest of justice. Palacios v. United States, 100 Fed. Cl. 656, 658 (2011); Thrustmaster, Inc. v. United States, 59 Fed. Cl. 672, 674 (2004). The transfer statute language "persuasively indicates that transfer, rather than dismissal, is the option ofchoice." Schrader v. United States, No. 11-285C, 2012 WL 310867, at *9 n.10 (Fed. Cl. Jan. 24, 2012) (quoting Britell v. United States, 318 F.3d 70, 73 (1st Cir. 2003)).
The government's motion to dismiss is based on an asserted lack of subject matter jurisdiction. The government argues that plaintiff's claims arise out of a maritime contract and therefore cannot be heard in this court.
The Suits in Admiralty Act, 46 U.S.C. §§ 30901-30918, and the Public Vessels Act, 46 U.S.C. §§ 31101-31113, govern admiralty claims against the government. These statutes preserve the traditional exclusive jurisdiction of the federal district courts over admiralty or maritime cases. See also 28 U.S.C. § 1333 (). The scope of the district courts' admiralty jurisdiction extends "to contracts that are 'wholly maritime' in nature." Marine Logistics, Inc. v. England, 265 F.3d 1322, 1324 (Fed. Cir. 2001). It is well-settled that contracts to repair, renovate, or convert an existing vessel are "wholly maritime" in nature. See, e.g., New Bedford Dry Dock Co. v. Purdy, 258 U.S. 96, 99 (1922); Umpqua Marine Ways, Inc. v. United States, 925 F.2d 409, 411 (Fed. Cir. 1991) (quoting Tucker v. Alexandroff, 183 U.S. 424, 438 (1902)). As such, contract claims relating to existing vessels may only be heard in federal district court.
In this case, plaintiff argues that the jurisdictional limitations set forth above do not apply because the present claims arise under the Contract Disputes Act ("CDA") andinvolve issues that do not relate to matters that are maritime in nature. Pl.'s Resp. at 7-8. Plaintiff contends that the CDA, which generally gives the Court of Federal Claims jurisdiction to hear contract disputes against the government, governs its non-maritime claims. Pl.'s Resp. at 7, 9.
The government argues that the CDA expressly exempts "maritime" contracts from the jurisdiction of the Court of Federal Claims. Def.'s Mot. at 4. In particular, the government asserts that the CDA preserves the traditional exclusive jurisdiction of the federal district courts over admiralty suits by expressly providing that suits "arising out of maritime contracts" are governed by the Suits in Admiralty Act or the Public Vessels Act. CDA, 41 U.S.C. § 7102(d); Sea-Land Serv., Inc. v. Danzig, 211 F.3d 1373, 1378 (Fed. Cir. 2000); S.W. Marine, Inc. v. United States, 896 F.2d 532, 534 (Fed. Cir. 1990) (). The court agrees with the government that the contract claims at issue in this case involve the performance of a contract to repair, renovate, or convert an existing vessel and are maritime in nature. Therefore, the court agrees with the government that plaintiff's claims must be brought in federal district court.
Plaintiff concedes that the ship-modification contract at issue here is a maritime contract, but argues that its claims are not "wholly maritime" in nature and that therefore jurisdiction is proper in this court. Pl.'s Resp. at 7. Plaintiff bases its argument on a recent case involving this court's bid...
To continue reading
Request your trial