Wolf Creek R.R. v. United States

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WOLF CREEK RAILROAD, LLC, Plaintiff, v. THE UNITED STATES, Defendant.

No. 23-1684

United States Court of Federal Claims

March 26, 2024

Lewis Philip Rhodes, Reston Law Group LLP, Reston, VA, for Plaintiff.

Sean Kelly Griffin, Civil Division, United States Department of Justice, Washington, DC, for Defendant.

OPINION AND ORDER

CAROLYN N. LERNER Judge

This matter comes before the Court on the Government's Motion to Dismiss for lack of subject-matter jurisdiction and failure to state a claim. Mot. to Dismiss, ECF No. 8. For the reasons below, the Court GRANTS the Motion to Dismiss.

I. Background

The United States Army Joint Munitions Command ("Army" or "JMC") owns the Milan Army Ammunition Plant ("MLAAP"), a government facility near Milan Tennessee. Compl. at 1-2, ECF No. 1. In 2008, the Army awarded American Ordnance, LLC ("AO") Contract No. W52P1J-09-E-0001 ("Facility Contract" or "Prime Contract"), which required AO to provide operations and maintenance services for MLAAP. Id. at 2; Mot. to Dismiss, Attach. A, ECF No. 8-1. The Army also issued Basic Ordering Agreement No. W52P1J-09-G-0001 ("BOA") to AO, which allowed it to acquire operation and maintenance services beyond the specified tasks in the Facility Contract. Mot. to Dismiss, Attach. B at 4, ECF No. 8-2. The BOA included a statement of work for the Armament Retooling and Manufacturing Support ("ARMS") initiative. Id. at 15. The Government could authorize AO to use government facilities in support of third-party agreements under the Facility Contract. Mot. to Dismiss at 7. The BOA also expressly stated that the Government was not a party to tenant use agreements ("TUA") entered by AO under the Facility Contract. Mot. to Dismiss, Attach. B, at 17, ECF No. 8-2.

In 2018, AO requested authorization from the Army to contract with Plaintiff Wolf Creek Railroad, LLC ("WCRR") to operate a rail system at MLAAP. Mot. to Dismiss, Attach. C, ECF No. 8-3; Attach. E, ECF No. 8-5 ("WCRR's TUA"). The Army approved this request but required the contract to be construed as a TUA. Mot. to Dismiss, Attach. D, at 1, ECF No. 8-4. The Government reserved the right to cancel the approved use if MLAAP was closed, sold, or transferred outside the Department of the Army. Id. at 3. Any cancellation would be at no cost to the Government. Id. Additionally, the Government required the TUA to stipulate that it could not be held liable if WCRR ceased operations because of changes in MLAAP's status. Id. On June 5, 2018, AO entered a twenty-five-year TUA with WCRR (TUA No. AO 18-0002) with an optional twenty-five-year extension. WCRR's TUA.

Two years later, in 2019, the Army notified AO that it was ending the "current mission needs for the entirety of MLAAP." Compl. Ex. 4, ECF No. 1-4. This notice instructed AO to "cease all [Armament Retooling and Manufacturing Support] efforts" and listed Patrick Lootens as the point of contact for further inquiries. Compl. Ex. 4. AO then directed WCRR to cease soliciting new leases at MLAAP. Compl. at 4. On April 26, 2021, the Army rescinded authorization for MLAAP facilities under all the TUAs. Id.; Compl. Ex. 5, ECF No. 1-5 (substituting David Deanda as the primary point of contact). As a result, AO terminated its TUA with WCRR. Compl. at 4.

WCRR alleges that it submitted a claim letter via email to the Army Contracting Officer ("CO") on May 30, 2023, seeking damages from the TUA's termination. Id. at 5; Pl.'s Resp. to Mot. to Dismiss ("Pl.'s Resp.") at 5, ECF No. 11. In the same email, WCRR attached a document titled "Claim Certification." Pl.'s Resp., Ex. 1, Attach. A, at 3, ECF No. 11-1. The Army did not respond to the email. Compl. at 5. WCRR claims that it followed up with the Army on August 1, 2023, and September 5, 2023, and both times the Army did not respond. Id.

On September 29, 2023, WCRR filed the instant Complaint alleging both breach of contract and the covenant of good faith and fair dealing. Compl. at 5-6. In response, the Government moved to dismiss the Complaint for lack of subject-matter jurisdiction and failure to state a claim. Mot. to Dismiss. The Government argues that the Court must dismiss this action for two independent reasons: 1) WCRR failed to properly submit a certified claim, and 2) WCRR cannot establish privity of contract with the Government. Id. at 9.

II. Legal Standards A. Jurisdiction

The Tucker Act grants this Court "jurisdiction to render judgment upon any claim by or against, or dispute with, a contractor arising under" the Contract Disputes Act ("CDA"). 28 U.S.C. § 1491(a)(2); see also 41 U.S.C. § 7102(a) (CDA applies to "any express or implied contract . . . made by an executive agency"). "If a plaintiff meets the jurisdictional requirements of the Tucker Act, the plaintiff also must demonstrate compliance with the mandatory requirements of the [CDA]." Crewzers Fire Crew Transp., Inc. v. United States, 111 Fed.Cl. 148, 153 (2013), aff'd, 741 F.3d 1380 (Fed. Cir. 2014). For this Court to exercise jurisdiction over a CDA claim, a contractor must bring an action "within 12 months from the date of receipt of a contracting officer's decision." 41 U.S.C. § 7104(b)(3). Further, jurisdiction "requires both a valid claim and a contracting officer's final decision on that claim." M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010). If a claim seeks more than $100,000, it must also meet the CDA's certification requirements. 41 U.S.C. § 7103(b)(1).

B. Motion to Dismiss Under Rule 12(b)(1) and 12(b)(6)

The Government moves to dismiss the Complaint under Rule 12(b)(1) for lack of subjectmatter jurisdiction and 12(b)(6) for failure to state a claim. Rules of the Court of Federal Claims ("RCFC") 12(b)(1), (b)(6). "In determining jurisdiction, a court must accept as true all undisputed facts asserted in the plaintiff's complaint and draw all reasonable inferences in favor of the plaintiff." Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011). Plaintiff bears the burden of establishing jurisdiction by a preponderance of evidence. Id. "If jurisdictional facts are challenged, the court is not limited to the pleadings in determining whether it possesses subject-matter jurisdiction to entertain the plaintiff's claims." Groundbreaker Dev. Corp. v. United States, 163 Fed.Cl. 619, 623 (2023) (citing Banks v. United States, 741 F.3d 1268, 1277 (Fed. Cir. 2014)). If the Court lacks jurisdiction over a claim, RCFC 12(h)(3) requires dismissal.

In evaluating a Rule 12(b)(6) motion, "the court must accept all well-pled factual allegations as true and draw all reasonable inferences in the plaintiff[']s favor." Ainslie v. United States, 355 F.3d 1371, 1373 (Fed. Cir. 2004). Plaintiff "must allege facts 'plausibly suggesting (not merely consistent with)' a showing of entitlement to relief" to state a valid claim and survive a 12(b)(6) motion. Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) (citing Bell Atl. Corp v. Twombly, 550 U.S. 544, 555 (2007)) (finding that these facts must "raise a right to relief above the speculative level"); Leider v. United States, 301 F.3d 1290, 1295 (Fed. Cir. 2002) (holding that dismissal under 12(b)(6) is proper when a plaintiff "can prove no set of facts in support of [its] claim which would entitle [it] to relief"). Thus, the key inquiry here is whether Plaintiff has pled sufficient facts to draw a reasonable inference that the Government is liable. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Whether Plaintiff is in privity with the Government is a threshold inquiry impacting both subject-matter jurisdiction (i.e., whether the waiver of sovereign immunity under the Tucker Act applies) and the merits of WCRR's claims (i.e., whether the Government is liable for termination and breach of the TUA). See First Annapolis Bancorp, Inc. v. United States, 644 F.3d 1367, 1373 (Fed. Cir. 2011) (discussing how lack of privity impacts subject-matter jurisdiction); Riviera Drilling &Expl. Co. v. United States, 61 Fed.Cl. 395, 400 (2004) (collecting authority supporting opposing views that privity of contract is jurisdictional or goes to the merits). In any case, if the jurisdictional issue and the merits are "inextricably intertwined, and the former cannot be resolved without considering and deciding (at least in part) the latter[,]" the Court may "bypass[] the jurisdictional question and decide[] the merits." Nippon Steel Corp. v. United States, 219 F.3d 1348, 1353 (Fed. Cir. 2000); see also Ransom v. United States, 17 Cl. Ct. 263, 267 (1989).

III. Discussion A. WCRR Did Not Submit a Certified Claim.

The Federal Circuit defines a valid CDA "claim" as "a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract." Zafer Constr. Co. v. United States, 40 F.4th 1365, 1367 (Fed. Cir. 2022) (quoting 48 C.F.R. § 52.233-1(c)). If the contractor seeks more than $100,000, as is the case here, the contractor must certify the claim. 41 U.S.C. § 7103(b)(1) (certification requirement generally), (b)(3) (definition of "defective certification"). No magic words are required, but the contractor must unequivocally seek the CO's final decision addressing the contractor's claim for its alleged losses. Zafer, 40 F.4th at 1369 (finding persuasive "a sworn statement attesting to the truth of the submission, includ[ing] detailed factual bases for its alleged losses, and . . . a sum certain based on the losses").

Because the Government challenges Plaintiff's jurisdictional assertion that a CDA claim was properly submitted and certified,^[1] the Court may consider...