Alaska Logistics, LLC v. Newtok Vill. Council

357 F.Supp.3d 916

ALASKA LOGISTICS, LLC, Plaintiff,

v.NEWTOK VILLAGE COUNCIL and Goldstream Engineering, Inc., Defendants.

Case No. 3:18-cv-00108-SLG

United States District Court, D. Alaska.

Signed January 11, 2019

Daniel James Park, Pro Hac Vice, Dustin C. Hamilton, LeGros Buchanan & Paul, Seattle, WA, for Plaintiff.

Michael J. Walleri, Gazewood & Weiner, P.C., Fairbanks, AK, Christian Bataille, Flanigan & Bataille, Anchorage, AK, for Defendants.

ORDER RE MOTION TO DISMISS AND MOTION TO STRIKE

Sharon L. Gleason, UNITED STATES DISTRICT JUDGE

Before the Court at Docket 18 is Defendant Newtok Village Council's Motion to Dismiss. Also before the Court at Docket 27 is Newtok's Motion to Strike Answer to Counterclaim. Plaintiff Alaska Logistics, LLC opposed both motions at Docket 29. Newtok replied at Docket 31. Oral argument was held on September 26, 2018 at Anchorage, Alaska before Judge Sharon L. Gleason.¹

BACKGROUND

Alaska Logistics, LLC ("Alaska Logistics") is a limited liability company based in Seattle, Washington.² Newtok Village Council ("Newtok") is the governing body of Newtok Village, a federally recognized Indian tribe located in Newtok, Alaska.³

Alaska Logistics' Complaint alleges as follows:

On March 17, 2017, Newtok issued an Invitation to Bid ("IFB") prepared by contractor Goldstream Engineering, Inc. ("Goldstream").⁴ The IFB stated that Newtok was "accepting bids from Interested Bidders to provide barge services from the Port of Anchorage to Mertarvik, AK ... on Nelson Island near Newtok, Alaska. Barge services require transport of 25,000 gallons of ultra low sulfur diesel (ULSD) and diverse road construction materials and equipment, including but not limited to corrugated metal pipe (culvert), vehicles, fuel tanks, and various heavy equipment."⁵ A planning manifest with estimated shipping weights and dimensions of the construction supplies and equipment was appended to the IFB.⁶ The IFB specified the Port of Anchorage as the "project Point of Departure," and identified June 1, 2017 as the estimated delivery date to Mertarvik.⁷ It further stated that "Bidders may choose to bid on one or both of [Newtok's] transportation needs," and instructed bidders to submit separate bid forms for "25,000 gallons of ULSD fuel delivery" and "Construction supplies & equipment."⁸ The IFB also instructed bidders to "provide a proposed purchase agreement between [Newtok] and the Bidder with project specific terms and conditions as part of the bid."⁹

In late March, Newtok issued addenda to the IFB.¹⁰ The addenda included estimated dimensions and weight for the construction materials and equipment cargo.¹¹ Alaska Logistics alleges that "[t]he vast majority of the cargo set forth in the Planning Manifest, as amended, consisted of ‘rolling stock’ or construction vehicles and freight which could easily be rolled on and off barges with minimal stevedoring."¹²

On March 31, 2017, Alaska Logistics submitted its bids to Newtok.¹³ Alaska Logistics included an unsigned proposed "Alaska Logistics, LLC Transportation Agreement" ("Transportation Agreement") with its bid.¹⁴ The proposed Transportation Agreement included a forum selection clause, which provided as follows:

Any action brought by either party to enforce any term or provision of this contract shall be commenced in the United States District Court for the Western District of Washington at Seattle, as appropriate. The parties submit to the exclusive personal jurisdiction of the United States District Court located in Seattle, Washington with respect to any litigation arising out of this agreement, with the substantially prevailing party entitled to receive its reasonable legal fees and costs. Shipper hereby submits to the jurisdiction of the courts of the United States District Court for the Western District of Washington at Seattle and consents to service fo process by certified mail, return receipt requested, addressed in accordance with this contract.¹⁵

The final page of the proposed agreement included unsigned signature lines, which identified "Goldstream Engineering for [Newtok Village Council]" as the "Shipper."¹⁶

On April 16, 2017, Goldstream informed Alaska Logistics that it was the apparent low bidder for the transportation of the construction supplies and equipment.¹⁷ After receiving notice of the bid award, "Alaska Logistics repeatedly asked Goldstream for an actual shipping manifest." However, Goldstream did not provide a shipping manifest until May 11, 2017.¹⁸ Alaska Logistics alleges that this delay "seriously impaired Alaska Logistics' ability to plan for and arrange the appropriate labor, shipping containers or flats, and other items necessary to load the cargo."¹⁹

On or shortly before May 15, 2017, Alaska Logistics received the cargo to be transported to Mertarvik.²⁰ Alaska Logistics contends that this cargo "materially differed from the representations set forth in the IFB and Addenda in several respects."²¹ First, the cargo provided for transport included modular housing units and refrigerated food items in addition to construction supplies and equipment. Second, this additional cargo required considerably more space to transport than had previously been indicated and did not consist of "rolling stock." Third, the cargo was not ready for shipment when it was provided to Alaska Logistics. Fourth, Alaska Logistics was asked to make separate deliveries originating from Seward, Alaska and Seattle, Washington, neither of which were points of departure identified in the IFB or the bids.²² In light of these issues, Alaska Logistics contacted Goldstream president Mark Sherman on May 15 and advised him that there would be additional costs associated with shipping the freight.²³ On May 18 — after the barges were underway — Alaska Logistics sent a formal change order request for $231,391.²⁴ Goldstream offered $65,000 in response to the change order request, which Alaska Logistics rejected.²⁵ On June 1, Newtok president Paul Charles sent a letter to Alaska Logistics stating that "[t]he Newtok Village Council is in agreement to pay the extra charges which total[ ] $213,391.00 per your May 18, 2017 request."²⁶

Meanwhile, while corresponding with Mr. Sherman and Mr. Charles, Alaska Logistics transported the cargo to Mertarvik.²⁷ Alaska Logistics alleges that issues with the cargo "forced [the company] to expend significantly more time and labor unloading the cargo."²⁸ It further contends that Newtok and Goldstream were not capable of receiving 10,000 gallons of fuel that Alaska Logistics had transported, which forced Alaska Logistics to leave its fuel tanks at Mertarvik.²⁹

On June 19, 2017, Alaska Logistics sent a second change order request for an additional $9,755.³⁰ On June 29, Mr. Charles sent a letter to Alaska Logistics requesting additional documentation supporting its change orders.³¹ The letter also stated that Newtok "acknowledges that additional freight costs have been incurred by Alaska Logistics ... and we are in agreement to pay the extra charges."³² Alaska Logistics provided Newtok with additional documentation to support its change orders on September 28.³³ However, Alaska Logistics alleges that Newtok and Goldstream have not "provide[d] any additional compensation for the barge transportation services Alaska Logistics provided to [Newtok] and Goldstream."³⁴

Alaska Logistics filed a Complaint against both Newtok and Goldstream on April 25, 2018.³⁵ The Complaint alleges six causes of action: (1) breach of contact against Newtok and Goldstream; (2) breach of good faith and fair dealing against Newtok and Goldstream; (3) quantum meruit against Newtok and Goldstream; (4) misrepresentation against Newtok; (5) misrepresentation against Goldstream; and (6) unfair trade practices against Newtok and Goldstream.³⁶ Newtok filed an Answer and Counterclaims on June 7, 2018. Newtok alleged five counterclaims: one claim for fraud, misrepresentation, and unfair and deceptive practices, and four claims for breach of contract.³⁷ Newtok filed the instant Motion to Dismiss on July 6, 2018.³⁸

On July 13, 2018, Alaska Logistics filed an "Amended Answer to Newtok's Counterclaims and Plaintiff's Counterclaims to Counterclaims."³⁹ The Amended Answer alleges six counterclaims, which are identical to the causes of action alleged in Alaska Logistics' initial Complaint. It also restates factual allegations from the Complaint.⁴⁰ Newtok filed the instant Motion to Strike Counterclaims to Counterclaims on July 23, 2018.⁴¹

LEGAL STANDARD

I. Jurisdiction and Applicable Law

The Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332 because the parties are completely diverse and the amount in controversy exceeds $75,000.00, exclusive of interest and costs.⁴² The Court also has admiralty jurisdiction pursuant to 28 U.S.C. § 1333 as Alaska Logistics alleges the breach of a maritime contract.⁴³

II. Standard for Dismissal

A defendant may seek dismissal of an action for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). When such a motion is made, the plaintiff has the burden of proving jurisdiction.⁴⁴ If the defendant raises a factual challenge to a court's jurisdiction, as opposed to a facial challenge based solely on the allegations in the complaint, a court may consider matters outside the pleadings in ruling on the motion.⁴⁵ Here, the record contains some additional materials.⁴⁶ "[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims."⁴⁷

The issue of tribal sovereign immunity is "quasi-jurisdictional" in the sense that it "may be asserted at any time."⁴⁸ "Although sovereign immunity is only quasi-jurisdictional in nature, Rule 12(b)(1) is still a proper vehicle for invoking sovereign immunity from suit."⁴⁹ "In the context of a Rule 12(b)(1) motion to dismiss on the basis of tribal sovereign immunity, ‘...