OAK GROVE TECHNOLOGIES, LLC, Plaintiff,
v.
THE UNITED STATES, Defendant,
and F3EA, INC., Defendant-Intervenor.
United States Court of Federal Claims
November 3, 2021
(Filed Under Seal: October 29, 2021)
OPINION AND ORDER [*]
Matthew H. Solomson Judge.
I. BACKGROUND
In the Court's decision on the merits of this case, the Court expressed the concern that the government's handling of the administrative record ("AR") "waste[d] judicial resources and undermine[d] trust in both the procurement and disputes processes." Oak Grove Techs., LLC v. United States, ___ Fed.Cl. ___, 2021 WL 3627111, at *13 (Aug. 2, 2021). Accordingly, the Court ordered the government "to show cause why Defendant should not be sanctioned for wasting the Court's (and Plaintiff's) time and resources on these administrative record deficiencies." Id. In particular, pursuant to Rule 11 of the Rules of the United States Court of Federal Claims ("RCFC") and this Court's inherent
authority, this Court "order[ed] the government to show cause why monetary sanctions should not be imposed against Defendant for its piecemeal and improper handling of the administrative record in this matter." Id. at *32. The Court specifically instructed the government to address its omission of two documents from the originally filed administrative record: (1) a Defense Contract Management Agency ("DCMA") report regarding Lukos (also referred to in the record as "Offeror H"), AR 4993-5006; and (2) what has been referred to as "the [RM] termination letter," AR 5388-89, which documented the Agency's removal of the first Source Selection Evaluation Board ("SSEB") Chairperson from his role in the procurement at issue.[1] Oak Grove, 2021 WL 3627111, at *32.
Regarding the RM termination letter, the Court explained at some length why that document was significant to the litigation and why it left the Court "with yet further, unanswered questions regarding the Agency's conduct in this procurement and the role [RM] played in it," as well as concerns regarding the nature of the corrective action and the "explanation the government previously provided to the Court regarding the initial record omissions." Oak Grove, 2021 WL 3627111, at *30. The Court noted that it "expect[ed] the government to address these concerns in detail." Id.
On August 17, 2021, and August 24, 2021, respectively, the government and plaintiff, Oak Grove Technologies, LLC ("Oak Grove"), filed responses to the Court's order to show cause. See ECF No. 75 ("Def. Resp."); ECF No. 76 ("Pl. Resp."). Despite the Court's having highlighted particular concerns in its merits decision, as noted supra, the government did not address them "in detail" or otherwise. Oak Grove, 2021 WL 3627111, at *30.
On August 26, 2021, the Court held a status conference to discuss further proceedings in this matter. ECF No. 77. Following that status conference, the Court ordered the government to file a reply brief for two purposes: (1) to respond to the arguments in Oak Grove's brief; and (2) to explain specific representations the government made in its merits briefs regarding the substance of the Agency's corrective action at issue, which the RM termination letter appeared to contradict. ECF No. 78 ("August 27, 2021 Order"). The government filed its reply brief on September 7, 2021. ECF No. 83 ("Def. Reply").
On September 14, 2021, the Court held oral argument on the show cause order. ECF No. 89 ("Tr.").
After considering the parties' respective positions, the Court concludes that RCFC 11 warrants the imposition of sanctions on the government. The Court does not
hold individual government counsel responsible for the fact that several critical documents were originally omitted from the administrative record. That does not mean, however, that the United States, acting by and through the Department of the Army (the "Agency"), can be let off the hook. The facts of this case and its procedural history demand some form of accountability for the government's mishandling of the administrative record.
Given that the predicate for sanctions is detailed at length in the Court's earlier decision, Oak Grove, 2021 WL 3627111, at *9-*13, *28-*30, the Court repeats itself here only to the extent necessary to address the arguments in the briefing on the show cause order.
II. RCFC 11 GENERAL PRINCIPLES
The undersigned is hardly the first judge of this Court to consider whether sanctions are warranted, pursuant to RCFC 11, for the improper compilation of the administrative record. See, e.g., Coastal Env't Grp., Inc. v. United States, 118 Fed.Cl. 15, 36 (2014) (imposing Rule 11 sanctions related to misconduct involving the administrative record); Gallup, Inc. v. United States, 131 Fed.Cl. 544, 547 (2017) (declining to impose Rule 11 sanctions where United States Special Operations Command agreed to pay plaintiff's attorney fees and litigation costs, committed to issuing guidance on the importance of integrity when preparing the record, and had begun planning training to prevent future disclosure problems).[2] Federal district courts from coast to coast have similarly recognized the possibility of sanctions for administrative record compilation failures.[3]
The Court begins with the text of RCFC 11, which provides, in part:
If, after notice and a reasonable opportunity to respond, the court determines that RCFC 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law
firm, or party that violated the rule or is responsible for the violation.
RCFC 11(c)(1) (emphasis added). Thus, a party may be sanctioned even if its counsel is not.[4] RCFC 11(b), in turn, provides (in relevant part):
By presenting to the court a pleading, written motion, or other paper - whether by signing, filing, submitting, or later advocating it - an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: . . . the factual contentions have evidentiary support . . . .
RCFC 11(b)(3) (emphasis added).
In this case, the Agency's contracting officer "certif[ied] that to the best of [his] knowledge and belief, and after careful review," that the filed "documents constitute the record of the administrative actions performed in the above-referenced Solicitation that is relevant to the issues raised in the plaintiff's Complaint." ECF No. 23-1 at 1 (Certification of Contracting Office Administrative Record). This certification, and the filing of the administrative record generally, are subject to RCFC 11. See Antonious v. Spalding & Evenflo Cos., Inc., 275 F.3d 1066, 1074 (Fed. Cir. 2002) (holding that the "obligation under Rule 11(b)(3) to conduct a proper prefiling investigation applies not only to the complaint but also to 'other paper[s]' filed in the case").[5] The government nowhere contends otherwise.
In the show cause order, this Court ordered the government to address why monetary sanctions should not be imposed pursuant to RCFC 11 and the Court's inherent authority. Oak Grove, 2021 WL 3627111, at * 32. The government, in its response, entirely ignored the directive to address Rule 11 and addressed only the Court's inherent power to impose sanctions - which the government accurately describes as "narrowly circumscribed . . . when there [is] no fraud or bad faith." Def. Resp. at 4. The government thus contends that "sanctions are not warranted because the issues associated with the AR in this case were not the product of bad faith or fraud." Id. at 5. According to the government, "all of the issues associated with the [AR] in this case were not due to any intentional omissions by the undersigned counsel"[6] but instead "were caused by the conception by the supporting contracting personnel . . . as to what the full scope of the AR should include for this protest." Def. Resp. at 1. Put yet differently, the government maintains, "the [Agency] believed in good faith that it was complete, while simply failing to appreciate the potential relevance of the omitted documents to the issues in this protest." Id. at 3.
The government cannot escape sanctions by ignoring the applicable Rule 11 standard and pointing only to the heightened standard for imposing sanctions pursuant to a court's inherent powers. The Rule 11 standard for imposing sanctions does not require a finding of bad faith and does not excuse a violation based on a showing of subjective good faith. See, e.g., Kilopass Tech., Inc. v. Sidense Corp., 738 F.3d 1302, 1313 (Fed. Cir. 2013) (explaining that Rule 11 "allows the imposition of punitive sanctions," "does not involve inquiry into a party's subjective good faith," and "does not require a showing of bad faith"). Instead, "Rule 11 functions to assure that parties assert litigation positions that are objectively reasonable at the time of filing." Id. (emphasis added). Supreme Court precedent also precludes a "good faith"-type defense to Rule 11 sanctions. See Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991) ("Rule 11 . . . imposes an objective standard of reasonable inquiry which does not mandate a finding of bad faith."). This objective standard is "intended to eliminate any 'empty-head pure-heart' justification[s] . . . ." Fed.R.Civ.P. 11 Advisory Committee Notes (1993 Amendment).[7]
Applying the correct Rule 11 standard to the facts here, the Court holds that the Agency's "fail[ure] to appreciate the potential relevance of the omitted documents to
the issues in this protest" was neither reasonable nor excusable. Def. Resp. at 3. Moreover, the Court holds that the failure to include the documents at issue in the originally filed administrative record: (1) contributed to substantial delays in the resolution of this case; (2) wasted the Court's time in attempting to engage in fact finding on...
