Crowley Gov't Servs., Inc. v. Gen. Servs. Admin.

38 F.4th 1099

CROWLEY GOVERNMENT SERVICES, INC., Appellant,

v.GENERAL SERVICES ADMINISTRATION and Robin Carnahan, in her official capacity as Administrator of the General Services Administration, Appellees.

No. 21-5242

United States Court of Appeals, District of Columbia Circuit.

Argued February 15, 2022

Decided July 1, 2022

James Y. Boland argued the cause for appellant. With him on the briefs were Nicholas M. DePalma and Kevin W. Weigand.

Steven Hazel, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, Mark B. Stern, Attorney, and Nitin Shah, General Counsel, General Services Administration. Stephanie R. Johnson and R. Craig Lawrence, Assistant U.S. Attorneys, entered appearances.

Before: Srinivasan, Chief Judge, Henderson and Jackson^* , Circuit Judges.

Karen LeCraft Henderson, Circuit Judge:

Crowley Government Services, Inc. sued the General Services Administration and its Administrator (collectively, GSA), seeking declaratory and injunctive relief to halt the GSA's purported practice of interfering with payments owed to Crowley under its contract with the United States Transportation Command (TRANSCOM). Crowley argues that the Administrative Procedure Act (APA), 5 U.S.C. §§ 701 – 706, and the general federal question statute, 28 U.S.C. § 1331, confer subject matter jurisdiction on the district court to review the GSA's alleged violation of the Contract Disputes Act of 1978, 41 U.S.C. § 7103(g), and the Transportation Act of 1940, 31 U.S.C. § 3726(b).¹ The question is whether Crowley's suit against the GSA, which is not a party to Crowley's contract with TRANSCOM, is "at its essence" contractual, Megapulse, Inc. v. Lewis , 672 F.2d 959, 968 (D.C. Cir. 1982) —including whether Crowley "in essence" seeks more than $10,000 in monetary relief from the federal government, Kidwell v. Dep't of Army, Bd. for Corr. of Mil. Recs. , 56 F.3d 279, 284 (D.C. Cir. 1995) —such that it is subject to the exclusive jurisdiction of the United States Court of Federal Claims (Claims Court) pursuant to the Tucker Act, 28 U.S.C. § 1491(a). The district court answered affirmatively and dismissed Crowley's complaint for lack of subject matter jurisdiction. Crowley Gov't Servs. v. GSA , No. 21-cv-2298, 2021 WL 4940953, at *9–11, *12 (D.D.C. Oct. 22, 2021).

We disagree. Crowley's action against the GSA in district court is not "at its essence" contractual because Crowley does not seek to enforce or recover on the contract with TRANSCOM. Nor does Crowley "in essence" seek monetary relief from the federal government in district court. Rather, it requests declaratory and injunctive relief that, if granted, would have considerable value independent of (and not negligible in comparison to) any monetary recovery Crowley may ultimately attain in other proceedings. Accordingly, we reverse and remand to the district court.

I. BACKGROUND

In November 2016, Crowley,² which "provides marine solutions, energy, and logistical services in domestic and international markets," entered a procurement contract with TRANSCOM, a unit of the Department of Defense (DOD).³ Compl. ¶¶ 12, 19, No. 21-cv-2298, Crowley Gov't Servs. v. GSA , 2021 WL 3923905 (D.D.C. Aug. 30, 2021), reprinted in Joint Appendix (J.A.) 6, 8–9. Crowley agreed to "provide[ ] various logistical, planning, and transportation coordination services to assist [TRANSCOM] with managing a large and complex network of moving goods and cargo for the [DOD]." Id. ¶ 20, reprinted in J.A. 9. Under the contract, government shippers send Crowley orders for cargo shipments to and from DOD facilities within the continental United States. Crowley, which does not handle or take possession of the cargo, coordinates the shipment process by subcontracting to third parties the transportation of the cargo from its origin and to its destination.

Crowley's contract with TRANSCOM sets forth performance standards for the transportation process, including delivery timeframes, permissible reasons for deviating from the timeframes and methods for calculating the timeframes. At the time Crowley filed its complaint, Crowley had coordinated approximately 1.2 million shipments for TRANSCOM under the contract.

This dispute arises from the GSA's audits of Crowley's invoices to TRANSCOM for payment for services provided under the contract. The GSA, which all parties agree is not party to the contract, asserted authority to audit Crowley's invoices pursuant to the Transportation Act. See 31 U.S.C. 3726(b) (authorizing GSA to "conduct pre- or post-payment audits of transportation bills of any Federal Agency"). Through the audits, the GSA concluded that Crowley had, inter alia , misapplied agreed-upon exceptions for delays in cargo delivery, used the wrong method for calculating transit times and submitted invoices based on improperly completed government documentation. As a result, the GSA has issued more than 50,000 Notices of Overcharge (NOCs) totaling approximately $37 million to Crowley since 2018.⁴

In January 2020, Crowley objected to the GSA's asserted authority to conduct the audits and submitted a claim to TRANSCOM's Contracting Officer challenging various categories of the NOCs under a provision of the contract it argued was governed by the Contract Disputes Act. See 41 U.S.C. § 7103(a), (g) (instructing contractors to submit claims against federal government to contracting officer, whose decision "is final and conclusive and is not subject to review by any forum, tribunal or Federal Government agency, unless an appeal or action is timely commenced as authorized by this chapter"). After reviewing Crowley's challenges, the Contracting Officer issued three final decisions covering various aspects of the claims, two in August 2020 and another a few months later in December 2020. Most relevant here, the Contracting Officer concluded in the December 2020 final decision that "the NOCs are erroneous," "are not factually supportable, and, hence, are not valid" and "should not have been issued." Contracting Officer's Final Decision Regarding Certified Claim, Defense Freight Transportation Services (DFTS), Contract HTC711-17-D-R003 ¶¶ 3(a)–(e) (Dec. 30, 2020), reprinted in J.A. 37. Although he agreed with Crowley that the funds withheld by the GSA, which "remain[ed] in GSA's possession," properly belonged to Crowley, the Contracting Officer determined that TRANSCOM "has no authority to order GSA to pay from its own funding source for disputed NOCs" and "does not have any authority to order payment from the U.S. Treasury's miscellaneous receipts account." Id. ¶ 3(f)(2), reprinted in J.A. 38. He then advised that Crowley could pursue the funds only "through the GSA Post-Payment Audit dispute process, appealable to the Civilian Board of Contract Appeals of the U.S. Court of Federal Claims." Id. (citing 41 C.F.R. §§ 102-118.600 et seq. ).

Notwithstanding the Contracting Officer's final decisions, the GSA had, until recently, continued to issue NOCs to Crowley. Joint Status Report ¶ 2, Crowley Gov't Servs. v. United States , No. 21-cv-1405 (PEC) (Fed. Cl. May 26, 2022), ECF No. 45 ("The parties have negotiated a separate agreement in which the United States will temporarily suspend the issuance of Notices of Overcharge (‘NOCs’) and any deductions for outstanding NOCs until November 19, 2022.").

In May 2021, Crowley filed suit against TRANSCOM in Claims Court, alleging breach of contract for nonpayment of services and seeking money damages and declaratory relief, as TRANSCOM had not reimbursed Crowley for the payments offset by the GSA. Compl. ¶¶ 1, 49–60, Crowley , No. 21-cv-1405 (PEC) (Fed. Cl. May 27, 2021), ECF No. 1. After the United States moved to dismiss, Crowley amended its complaint, adding an alternative count against the GSA under 49 U.S.C. § 14705, seeking recovery of the charges already deducted by the GSA through the 31 U.S.C. § 3726(b) audits. Am. Compl. ¶¶ 17, 98–102, Crowley , No. 21-cv-1405 (PEC), 2021 WL 3923919 (Fed. Cl. Aug. 26, 2021), ECF No. 8. Crowley submits to us that it included the alternative count "only as a last resort to preserve [its] monetary claim due to the three-year statute of limitations" but also maintains that "[s]ection 14705 does not apply and cannot provide a jurisdictional basis for Crowley to challenge GSA's violation of the Contract Disputes Act's finality clause." Appellant's Br. 21 n.3. Crowley's action, which remains pending in Claims Court, is currently at the discovery stage. See Joint Status Report, supra , ¶ 5.

Several days after filing its amended complaint in Claims Court in late August 2021, Crowley filed a two-count complaint against the GSA in district court. Count I alleged that the GSA exceeded its statutory authority by improperly auditing Crowley's invoices and issuing NOCs in violation of (1) the Transportation Act, 31 U.S.C. § 3726(b), because Crowley is not a "carrier or freight forwarder" and its invoices are not "transportation bills" under the statute, id. § 3726(a), and (2) the Contract Disputes Act, 41 U.S.C. § 7103(g), because the NOCs contravene the TRANSCOM Contracting Officer's final decisions and the statute's so-called finality clause. Compl. ¶¶ 108–26, reprinted in J.A. 20–22; see also Appellant's Br. 6–10 (arguing dispute resolution schemes under Transportation Act and Contract Disputes Act are mutually exclusive and cannot both apply to same contract). Count II alleged, in the alternative, that the GSA's actions are ultra vires , thus warranting judicial review and injunctive relief because no other remedy is available. Compl. ¶¶ 127–37, reprinted in J.A. 22–23. The GSA's audits, Crowley maintained, caused it "certain, imminent, and unrecoverable harm," Appellant's Br. 12, including: (1) significant time and expense reviewing and challenging thousands of NOCs, (2) the uncertainty of being subjected to what it characterizes as the mutually exclusive dispute...