Leidos, Inc. v. Hellenic Republic

• Decision Date: 02 February 2018
• Docket Number: No. 17-7082,17-7082
• Citation: 881 F.3d 213
• Parties: LEIDOS, INC., formerly known as Science Applications International Corporation, Appellee v. HELLENIC REPUBLIC, Appellant
• Court: U.S. Court of Appeals — District of Columbia Circuit

881 F.3d 213

LEIDOS, INC., formerly known as Science Applications International Corporation, Appellee

v.HELLENIC REPUBLIC, Appellant

No. 17-7082

United States Court of Appeals, District of Columbia Circuit.

Argued December 6, 2017

Decided February 2, 2018

Neal Goldfarb, Washington, DC, argued the cause and filed briefs for the appellant. Max F. Maccoby, Washington, DC, entered an appearance.

William T. O'Brien, Washington, DC, argued the cause and filed the brief for the appellee. Allen B. Green and Ivan W. Bilaniuk, Washington, DC, were with him on brief.

Before: Henderson, Tatel and Kavanaugh, Circuit Judges.

Karen LeCraft Henderson, Circuit Judge:

This case is a testament to the rise of the dollar—and the precipitous decline of the euro—over the last four years. In July 2013, Leidos, Inc. (Leidos)¹ won an arbitration award against the Hellenic Republic² resulting from security work it performed in connection with the 2004 Summer Olympic Games held in Athens, Greece. The award consisted of €39,818,298 in damages and $162,500 in costs. Upon receiving the award, Leidos promptly petitioned the United States District Court for the District of Columbia to confirm and enforce it. After approximately three years of intermittent stays, status updates, motions and parallel litigation in Greek courts, the district court confirmed the arbitration award and entered judgment—in euros—in favor of Leidos.

Pursuant to Federal Rule of Civil Procedure 59(e), Leidos then moved to convert the award into U.S. dollars based on the exchange rate ($1.3017 to €1) on July 2, 2013, the date of the original arbitral award. The district court granted the motion. Because the exchange rate had dropped 19.1 per cent from the award date to the judgment date ($1.0533 to €1 on January 6, 2017), the total dollar value of the conversion increased the value of the arbitral award by approximately $11.9 million. The Hellenic Republic appealed. For the following reasons, we conclude that the district court mistakenly granted Leidos's motion and we reverse.

I.

In May 2003, the Hellenic Republic contracted with Leidos to provide a public-safety infrastructure system for the 2004 Athens Summer Olympics. The contract was written in Greek and provided for payment in euros. After a series of disputes regarding the Hellenic Republic's acceptance of the infrastructure system, the parties agreed to a contract modification (Modification No. 5) that included certain dispute-resolution provisions, specifically:

Any claim or dispute arising from or related to the current Contract or its interpretation is to be finally resolved by Arbitration according to the Rules of Arbitration of the International Chamber of Commerce (ICC) and shall be tried under Greek Law. Arbitration shall take place in Athens, Greece, by three Greek Arbitrators.

Joint Appendix (JA) 101. Modification No. 5 further provided that Greek was the language of the arbitration and that the result of the arbitration was final and binding on both parties. Id.

The parties' contractual disagreements continued after Modification No. 5 and, on June 16, 2009, Leidos filed a Request for Arbitration. The arbitral tribunal heard the case over eight days in May 2012. On July 2, 2013, the tribunal issued its final award, which ordered the Hellenic Republic to pay Leidos: (1) €39,818,298 in damages; (2) $162,500 in arbitration costs; and (3) simple interest of 6 per cent beginning July 11, 2013, the date the award was served on the Hellenic Republic. JA 19.

On July 12, 2013, Leidos filed a Petition to Confirm Arbitration and to Enter Judgment in the district court for the District of Columbia. On September 5, 2013, the Hellenic Republic filed a parallel suit in the Athens Court of Appeals seeking to set aside the arbitration award. The Hellenic Republic subsequently answered Leidos's complaint in district court, alleging six affirmative defenses under the Federal Arbitration Act, 9 U.S.C. §§ 201 et seq. On March 28, 2014, the district court granted the parties' joint motion to stay proceedings pending the resolution of the Greek litigation. Several months later, Leidos submitted in district court two proposed orders seeking to confirm the award: one on September 8, 2014 and the other on December 17, 2014. The district court did not rule on either of the proposed orders, instead holding the case in abeyance while the Greek litigation ran its course.

While the case was stayed in the United States, the Greek litigation made its way through that judicial system. First, the Athens Court of Appeals set aside the arbitration award, reasoning that the parties' contract was tainted by the corruption of Leidos's subcontractor, Siemens. Leidos appealed that decision to the Greek Supreme Court, which unanimously reversed the Athens Court of Appeals and, on September 22, 2016, reinstated the arbitral award.³

On November 3, 2016, the district court asked the parties their positions on the effect of the Greek Supreme Court decision. Neither party mentioned currency conversion in their respective responses. On January 5, 2017, the court granted Leidos's Petition to Confirm the Arbitration Award and to Enter Judgment. The next day, the court clerk entered judgment in favor of Leidos in the amount of €39,818,298. The judgment form made no mention of interest or costs. Thereafter, Leidos moved to correct the judgment under Rule 60(a) and to alter or amend the judgment under Rule 59(e). It requested $162,500 in costs, as awarded by the tribunal, as well as pre- and post-judgment interest as to damages and costs. It further requested that the court alter or amend the entry of judgment to convert the total award into U.S. dollars.

The district court granted Leidos's motion in full, correcting "clerical mistakes" under Rule 60 and curing "clear error" or "manifest injustice" under Rule 59(e). In re Arbitration of Certain Controversies between Sci. Applications Int'l Corp. & Hellenic Republic , 249 F.Supp.3d 300, 302–03 (D.D.C. 2017). Regarding the clerical mistakes, the district court amended the judgment to include $162,500 in costs (as provided in the original arbitral award) plus $34,031.51 in interest on that sum. The court also awarded €8,115,607.64 in interest on the damages award itself. Applying Rule 59(e), the district court converted the entire award into U.S. dollars using the exchange rate in effect on July 2, 2013, the date of the arbitral award. The amended judgment totaled $62,731,104.80. Because the value of the euro had declined significantly against the dollar over the course of the litigation, converting the judgment increased its value by approximately $11.9 million. The Hellenic Republic now appeals only the conversion of the arbitral award under Rule 59(e).

II.

We review the district court's decision granting Leidos's Rule 59(e) motion for abuse of discretion. Flynn v. Dick Corp. , 481 F.3d 824, 829 (D.C. Cir. 2007). "A district court by definition abuses its discretion when it makes an error of law." Koon v. United States , 518 U.S. 81, 100, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996).

In granting Leidos's motion, the district court committed two errors. First, the district court incorrectly concluded that our Rule 59(e) precedent did not apply to Leidos because it was not a "losing party." In re Arbitration of Certain Controversies between Sci. Applications Int'l Corp. & Hellenic Republic , 249 F.Supp.3d at 302–03. Second, the court erred in concluding that it was manifestly unjust to award Leidos judgment in euros even though Leidos had expressly sought relief in euros at least three times and had not asked for dollars until its post-judgment motion. Id. at 304–05. In addition, the district court misinterpreted—and thus mistakenly relied on—our opinion in Continental Transfert Technique Ltd. v. Federal Government of Nigeria , 603 Fed.Appx. 1 (D.C. Cir. 2015) (per curiam), which we address below.

Federal Rule of Civil Procedure 59(e) provides a limited exception to the rule that judgments are to remain final. See Derrington–Bey v. Dist. of Colum. Dep't of Corrs. , 39 F.3d 1224, 1225 (D.C. Cir. 1994). Under Rule 59(e), the court may grant a motion to amend or alter a judgment under three circumstances only: (1) if there is an "intervening change of controlling law"; (2) if new evidence becomes available; or (3) if the judgment should be amended in order to "correct a clear error or prevent manifest injustice." Firestone v. Firestone , 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam) (quoting Nat'l Tr. v. Dep't of State , 834 F.Supp. 453, 455 (D.D.C. 1993) ). Although the court has considerable discretion in ruling on a Rule 59(e) motion, the reconsideration or amendment of a judgment is nonetheless an extraordinary measure. Id.

We have held that Rule 59(e) motions are aimed at "reconsideration, not initial consideration." District of Columbia v. Doe , 611 F.3d 888, 896 (D.C. Cir. 2010) (quoting Nat'l Ecological Found. v. Alexander , 496 F.3d 466, 477 (6th Cir. 2007) ). " Rule 59(e) permits a court to alter or amend a judgment, but it may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment." Exxon Shipping v. Baker , 554 U.S. 471, 486 n.5, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) (quoting 11 C. Wright & A. Miller, Federal Practice and Procedure § 2810.1, pp. 127–128 (2d ed. 1995) ). It is "not a vehicle to present a new legal theory that was available prior to judgment." Patton Boggs LLP v. Chevron Corp. , 683 F.3d 397, 403 (D.C. Cir. 2012).

In the same vein, manifest injustice "does not exist where ... a party could have easily avoided the outcome, but instead elected not to act until after a final order had been entered." Ciralsky v. CIA , 355 F.3d 661, 665 (D.C. Cir. 2004). In determining whether a decision could result in manifest injustice, we examine whether it would "upset settled expectations—expectations on which a party may reasonably...