Northrop Grumman Technical Services, Inc. v. Dyncorp International LLC, 072817 FED4, 16-1644

Attorney:Catherine Carroll, WILMER CUTLER PICKERING HALE & DORR LLP, Washington, D.C., for Appellant. Attison Leonard Barnes, III, WILEY REIN, LLP, Washington, D.C., for Appellee. William B. Porter, BLANKINGSHIP & KEITH, P.C., Fairfax, Virginia; Edward N. Siskel, Howard M. Shapiro, Madhu Chugh, Jamie S. G...
Judge Panel:Before GREGORY, Chief Judge, and KING and KEENAN, Circuit Judges.
Opinion Judge:BARBARA MILANO KEENAN, Circuit Judge.
Party Name:NORTHROP GRUMMAN TECHNICAL SERVICES, INC., Plaintiff-Appellant, v. DYNCORP INTERNATIONAL LLC, Defendant-Appellee.
Case Date:July 28, 2017
Docket Nº:16-1644
 
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NORTHROP GRUMMAN TECHNICAL SERVICES, INC., Plaintiff-Appellant,

v.

DYNCORP INTERNATIONAL LLC, Defendant-Appellee.

No. 16-1644

United States Court of Appeals, Fourth Circuit

July 28, 2017

          Argued: May 9, 2017

         Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. James C. Cacheris, Senior District Judge. (1:16-cv-00534-JCC-IDD)

         ARGUED:

          Catherine Carroll, WILMER CUTLER PICKERING HALE & DORR LLP, Washington, D.C., for Appellant.

          Attison Leonard Barnes, III, WILEY REIN, LLP, Washington, D.C., for Appellee.

         ON BRIEF:

          William B. Porter, BLANKINGSHIP & KEITH, P.C., Fairfax, Virginia; Edward N. Siskel, Howard M. Shapiro, Madhu Chugh, Jamie S. Gorelick, WILMER CUTLER PICKERING HALE & DORR LLP, Washington, D.C., for Appellant.

          Rand L. Allen, Nicole J. Owren-Wiest, Rebecca L. Saitta, WILEY REIN LLP, Washington, D.C.; Richard C. Sullivan, Jr., BEAN KINNEY & KORMAN PC, Arlington, Virginia, for Appellee.

          Before GREGORY, Chief Judge, and KING and KEENAN, Circuit Judges.

          BARBARA MILANO KEENAN, Circuit Judge.

         In 2007, Northrop Grumman entered into a contract with DynCorp, which served as a subcontract for DynCorp to supply personnel in support of Northrop Grumman's performance of a prime contract with the United States Department of Defense. A dispute arose regarding DynCorp's billing practices and, in March 2015, Northrop Grumman filed suit against DynCorp in a Virginia state court seeking to compel DynCorp to provide documentation to substantiate DynCorp's invoices. DynCorp later filed counterclaims against Northrop Grumman based on Northrop Grumman's refusal to pay over $40 million in outstanding invoices.

         After the state case had been pending for over a year, and shortly before trial, Northrop Grumman filed a notice of removal to federal court. Northrop Grumman asserted removal jurisdiction under the federal officer removal statute, 28 U.S.C. § 1442, claiming as a federal defense that the case was unripe and thus should be litigated in a federal forum. The district court granted DynCorp's motion to remand. Among other things, the district court held that the notice of removal was untimely, and that Northrop Grumman had waived any right to removal.

         Upon our review, we affirm the district court's order remanding the case to the state court. Northrop Grumman filed an untimely notice of removal after demonstrating a clear intent to pursue the case to completion in the state court.1

         I.

         In 2007, the United States Department of Defense (DOD, or the government) awarded Northrop Grumman a prime contract to support the government's efforts to reduce narcotics trafficking in Afghanistan. Shortly thereafter, Northrop Grumman and DynCorp entered into a subcontract for DynCorp to supply personnel for Northrop Grumman's performance of the prime contract. The subcontract and associated task orders incorporated descriptions of certain "labor categories" established by the government in the prime contract. These descriptions included the duties, experience, and qualifications for persons assigned, or "mapped, " to each labor category. DynCorp proposed hourly rates of payment for the labor categories to which its employees would be assigned, and the subcontract required DynCorp to provide documentation substantiating the labor costs in its invoices.

         The parties agree that the labor categories in the prime contract were a poor fit for the type of work being performed by DynCorp personnel. Nevertheless, because the government declined to revise the labor categories, Northrop Grumman advised DynCorp to map its employees based on the existing categories.2 In 2014, citing concerns that federal investigators were questioning DynCorp's labor mapping practices, Northrop Grumman sought documentation from DynCorp to substantiate DynCorp's labor mapping and billing. When DynCorp refused these requests, Northrop Grumman stopped submitting DynCorp's invoices to the government for payment and, in November 2014, informed DynCorp that Northrop Grumman rejected the labor charges reflected in all current invoices.

         In March 2015, Northrop Grumman filed suit against DynCorp in Fairfax County Circuit Court (the state court). In an amended complaint filed in June 2015, Northrop Grumman sought an order compelling DynCorp to provide requested documentation to substantiate its invoices. Northrop Grumman also asserted a breach of contract claim based on DynCorp's alleged refusal to maintain and produce records as required by the subcontract.

         In September 2015, DynCorp filed counterclaims in the state court against Northrop Grumman for breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment. The counterclaims were based on Northrop Grumman's failure to pay DynCorp over $40 million in outstanding invoices.

         Northrop Grumman later filed a demurrer to the counterclaims. The state court overruled the demurrer on the claims for breach of contract and breach of the duty of good faith and fair dealing, and sustained the demurrer without prejudice on the unjust enrichment count. Following this ruling, DynCorp filed ...

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