Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 1 of 18 IN THE UNITED STATES COURT OF FEDERAL CLAIMS Number 11-445C Judge Mary Ellen Coster Williams TEKTEL, INC., v. Plaintiff, THE UNITED STATES, Defendant. PLAINTIFF S BRIEF IN SUPPORT OF RESPONSE TO DEFENDANTS RCFC 12(b) MOTIONS Cyrus E. Phillips IV ALBO & OBLON, L.L.P. Courthouse Plaza 2200 Clarendon Boulevard, Suite 1201 Arlington, Virginia 22201-3331 Attorney for Plaintiff, Tektel, Incorporated REDACTED VERSION
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 2 of 18 TABLE OF CONTENTS TABLE OF AUTHORITIES......................................................................... ii-iii ISSUES PRESENTED...........................................................................1 ARGUMENT...................................................................................... 1-12 I. THE PARTIES COURSE OF DEALINGS DEMONSTRATES THAT THESE INSTRUMENTS ARE NOT ORDERS PLACED UNDER A STRANGER S GSA SCHEDULE CONTRACT............................................................1-10 II. PLAINTIFF TEKTEL MAY PROPERLY SEEK A DECLARATORY JUDGMENT TOGETHER WITH ITS DEMAND FOR MONIES PRESENTLY DUE....................10-12 CONCLUSION................................................................................... 12-13 CERTIFICATE OF SERVICE.......................................................................... 14 - i -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 3 of 18 TABLE OF AUTHORITIES STATUTES 28 U.S.C. 1491(a)(1)............................................................. 1, 9, 10, 11 REGULATIONS Federal Acquisition Regulation 8.406-6, DISPUTES, 48 C.F.R., Ch. 1 (10-1-08 Edition)............................................2-3 Federal Acquisition Regulation 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984), 48 C.F.R., Ch. 1 (10-1-08 Edition)................................................................. 9 RESTATEMENTS RESTATEMENT OF THE LAW, SECOND, CONTRACTS, 202, Rules in Aid of Interpretation..................................................8 CASES Frolow v. Wilson Sporting Goods Co., 710 F.3d 1303 (Fed. Cir. 2013)............................................................8-9 Holmes v. United States, 657 F.3d 1303 (Fed. Cir. 2011)............................................................ 10 - ii -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 4 of 18 James v. Zurich-American Insurance Co., 203 F.3d 250 (3 rd Cir. 2000), cert. denied June 29 th, 2000, 2000 U.S. LEXIS 4531...........................................9 National Air Traffic Controllers Association v. United States, 160 F.3d 714 (Fed. Cir. 1998)..............................................................11 Sharp Electronics Corp. v. McHugh, 707 F.3d 1367 (Fed. Cir. 2013)............................................................6-7 Smith v. United States, 709 F.3d 1114 (Fed. Cir. 2013).......................................................... 9-10 - iii -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 5 of 18 PLAINTIFF S BRIEF IN SUPPORT OF PLAINTIFF S RESPONSE TO DEFENDANTS RCFC 12(b) MOTIONS ISSUES PRESENTED I. Are These Instruments Placed Under A Stranger s GSA Schedule Contract, Or Instead Are These Instruments Binding Bilateral Agreements Between Defendants And Plaintiff Tektel Within The Tucker Act Jurisdiction, 28 U.S.C. 1491(a)(1), Of The United States Court Of Federal Claims? II. Has Plaintiff Tektel Properly Joined A Request For Declaratory Relief With A Demand For Monies Presently Due? ARGUMENT I. The Parties Course Of Dealing Demonstrates That These Instruments Are Not Orders Placed Under A Stranger s GSA Schedule Contract. Defendants United States District Court for the Northern District of Illinois and Administrative Office of the United States Courts argue these Instruments are placed - 1 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 6 of 18 under a GSA Schedule Contract between Nortel Networks, Incorporated (Nortel) and the United States. ECF Document Number 58 *SEALED*, pages 15 of 45 and 23 of 45, filed April 16 th, 2013. Because Nortel is a stranger to these proceedings and under the GSA Schedule Contract Plaintiff Tektel s status is relegated to that of an amanuensis for Nortel, Defendants argue Plaintiff Tektel is not in privity of Contract with Defendants. ECF Document Number 58 *SEALED*, pages 26 through 27 of 45, filed April 16 th, 2013. If these Instruments are read as Orders placed under Nortel s GSA Schedule Contract, then they must have been terminated as required by Federal Acquisition Regulation 8.406-6, 48 C.F.R., Ch. 1 (10-1-08 Edition). Federal Acquisition Regulation 8.406-6 distributes authority to resolve Disputes concerning Orders placed under GSA Schedule Contracts depending on the particulars of the Dispute: 8.406-6 Disputes. (a) Disputes pertaining to the performance of orders under a schedule contract. - 2 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 7 of 18 (1) Under the Disputes clause of the schedule contract, the ordering activity contracting officer may (i) Issue final decisions on disputes arising from performance of the order (but see paragraph (b) of this section; or (ii) Refer the dispute to the schedule contracting officer. (2) The ordering activity contracting officer shall notify the schedule contracting officer promptly of any final decision. (b) Disputes pertaining to the terms and conditions of schedule contracts. The ordering activity contracting officer shall refer all disputes that relate to the contract terms and conditions to the schedule contracting officer for resolution under the Disputes clause of the contract and notify the schedule contractor of the referral..... Federal Acquisition Regulation 8.406-6, 48 C.F.R., Ch. 1 (10-1-08 Edition) (Emphasis added). On Monday, March 1 st, 2010 Michael W. Dobbins, formerly the Clerk of the United States District Court for the Northern District of Illinois, wrote Plaintiff Tektel that I have received a background investigation report to determine your suitability to be a contractor for the United States District Court, Northern District of Illinois. - 3 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 8 of 18 (Emphasis added). The Clerk wrote in this letter that Plaintiff Tektel s President had previously been convicted of drug related offenses and that this is considered to be a felony charge. The Clerk did not provide a copy of the background investigation report and did not request documentation of the Judgment of Conviction. ECF Document Number 37-1, pages 15 through 16 of 25, filed October 18 th, 2012. On Friday, March 5 th, 2010 Plaintiff Tektel wrote the Clerk its President had never been convicted of a felony offense and that the felony offense charged had been reduced to a misdemeanor conviction. Plaintiff Tektel asked the Clerk to allow Plaintiff Tektel, its technicians and its President, to continue performance of the two Instruments here in dispute. Plaintiff Tektel explained it was delivering services to other Federal agencies, and these other Federal agencies required, and had performed, background checks. On Wednesday, March 17 th, 2010 Plaintiff Tektel provided the Clerk with a Case Number from the Kentucky court system documenting that its - 4 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 9 of 18 President had been convicted of a misdemeanor, not the felony charged. ECF Document Number 37-1, page 16 of 25, filed October 18 th, 2012. On Thursday, March 18 th, 2010 the Clerk wrote Plaintiff Tektel: I previously gave you until March 16, 2010 to provide any documentation necessary to clarify this issue. You provided two e-mails informing me that this was not a felony, but you provided no documentation. The contract with your firm is considered highly sensitive. I have consulted with the Court, and the Court has more stringent policies than other government units. I am hereby canceling the contract for cause, effective at the close of business on Friday, March 19, 2010. Please make the appropriate arrangements with... of my office regarding the return of any equipment. I do wish you success in your future endeavors. ECF Document Number 37-1, page 17 of 25, filed October 18 th, 2012. This was far more than a routine Dispute about facts concerning the performance of these two Instruments; it involved Plaintiff s Tektel s assertion that these Instruments did not extend suitability requirements to Plaintiff Tektel s President and that - 5 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 10 of 18 other Federal Agencies had determined Plaintiff Tektel to be a suitable Federal Contractor. The Clerk confirmed that more than the facts of performance of these Instruments were in issue when he claimed cause to support the cancellation because the Court has more stringent policies than other government units. There is a bright-line rule all Disputes requiring interpretation of a GSA Schedule Contract and Orders placed thereunder go to a GSA Schedule Contracting Officer even if those disputes also require interpretation of the order, or involve performance under the order. Sharp Electronics Corp. v. McHugh, 707 F.3d 1367, 1373 (Fed. Cir. 2013). Under a GSA Schedule Contract and Orders placed under that GSA Schedule Contract, authority to decide a dispute regarding interpretation of schedule contract provisions, in whole or in part, regardless of whether the parties frame the dispute as pertaining to performance, belongs solely to the GSA Schedule Contracting Officer, not to someone at the Ordering Activity. If the Dispute concerns interpretation of any part of the Instrument s terms and conditions, and not solely the - 6 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 11 of 18 factual details of performance, then the Ordering Activity cannot decide it. Id., 707 F.3d, at 1374. Here it was the Ordering Activities, the United States District Court for the Northern District of Illinois and the Administrative Office of the United States Courts, which decided that the terms of these Instruments encompassed their more stringent policies regarding the suitability of those with whom they were conducting the public s business. But if these Instruments were only Orders under Nortel s GSA Schedule Contract and if Plaintiff Tektel were but an amanuensis for Nortel, then it was only the GSA Schedule Contracting Officer, not the Clerk for the United States District Court for the Northern District of Illinois or the Administrative Office of the United States Courts, who had the authority to decide whether these Instruments imposed a duty on Plaintiff Tektel which had been breached, a breach justifying the cancellation of these Instruments rather than their Termination for Convenience. - 7 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 12 of 18 The RESTATEMENT OF THE LAW, SECOND, CONTRACTS, 202, Rules in Aid of Interpretation, (5) provides that [w]herever reasonable, the manifestations of intention of the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance, course of dealing, or usage of trade. Comment h. Preference for consistency, explains that [a] meaning consistent with all the circumstances is preferred to a meaning which requires part of the context be disregarded. So if these Instruments are nothing more than Orders placed under Nortel s GSA Schedule Contract, then how is it that the Clerk of the United States District Court for the Northern District of Illinois, not the GSA Schedule Contracting Officer, decided that Plaintiff Tektel was in breach of its obligations under these Instruments, a breach justifying their cancellation rather than their Termination for Convenience? His lack of authority if these Instruments are nothing more than Orders placed under Nortel s GSA Schedule Contract is context which cannot be disregarded. [A] course - 8 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 13 of 18 of performance is the best indication of what the parties meant by their Agreement. Frolow v. Wilson Sporting Goods Co., 710 F.3d 1303, 1316 (Fed. Cir. 2013) (New Jersey law); [P]arties to a contract are free to define and clarify or even to change the contract s terms.... James v. Zurich-American Insurance Co., 203 F.3d 250, 256 (3 rd Cir. 2000), cert. denied June 29 th, 2000, 2000 U.S. LEXIS 4531. The DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) clause, Federal Acquisition Regulation 52.249-8, 48 C.F.R., Ch. 1 (10-1-08 Edition) incorporated in these two Instruments, ECF Document Number 37-1, pages 13 through 14 of 25, filed October 18 th, 2012, expressly provides in subparagraph (g) a substantive right to money damages, i.e., these two Instruments promise that if it is determined Plaintiff Tektel was not in default, or that Plaintiff Tektel s default was excusable, then the rights and obligations of these parties arising by reason of the Clerk s cancellation of these two Instruments for cause shall be determined as if this cancellation had been issued for the convenience of the Government, entitling Plaintiff Tektel to an equit- - 9 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 14 of 18 able adjustment. Smith v. United States, 709 F.3d 1114, 1116 (Fed. Cir. 2013); [W]hen a breach of contract claim is brought in the Court of Federal Claims under the Tucker Act [28 U.S.C. 1491(a)(1)], the plaintiff comes armed with the presumption that money damages are available.... Holmes v. United States, 657 F.3d 1303, 1314 (Fed. Cir. 2011). II. Plaintiff Tektel May Properly Seek A Declaratory Judgment Together With Its Demand For Monies Presently Due. Defendants United States District Court for the Northern District of Illinois and Administrative Office of the United States Courts suppose, wrongly, that Plaintiff Tektel seeks only a Declaratory Judgment, arguing that this assertion does not satisfy the jurisdictional requirement of 28 U.S.C. 1491(a)(1) for a demand for presently due money damages. ECF Document Number 58 *SEALED*, pages 37 through 38 of 45, filed April 16 th, 2013. - 10 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 15 of 18 Defendants misread National Air Traffic Controllers Association v. United States, 160 F.3d 714 (Fed. Cir. 1998), a Case which stands only for the unremarkable proposition that this Court s 28 U.S.C. 1491(a)(1) jurisdiction does not attach to a demand for declaratory relief not coupled with a demand for presently due monies, Id., 160 F.3d, at 716-717. The problem in National Air Traffic Controllers was that the Plaintiffs there were barred from asserting a claim for monies presently due because their collective bargaining agreement required their money claim be submitted to arbitration, not to this Court. National Air Traffic Controllers holds that although this Court has been authorized to grant equitable relief in certain limited circumstances, those circumstances do not include the general authority to grant equitable relief whenever a declaratory judgment or an injunction would assist a claimant in obtaining money benefits in another forum. Id., 160 F.3d, at 716 (Emphasis added). Plaintiff Tektel s Amended Complaint here properly couples a claim for $123,614.26 in presently due monies, ECF Document Number 37-1, pages 3 and 4 of - 11 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 16 of 18 25 and page 23 of 25, filed October 18 th, 2012, a claim made in this forum, with a claim for a Declaratory Judgment in aid of that money claim, ECF Document Number 37-1, pages 22 and 23 of 25, filed October 18 th, 2012. CONCLUSION For all of the reasons set forth in the foregoing Brief in Support of Plaintiff Tektel s Response to Defendants RCFC 12(b) Motions, Plaintiff Tektel respectfully requests that the Court deny the RCFC 12(b) Motions filed by Defendants United States District Court for the Northern District of Illinois and the Administrative Office of the United States Courts. Respectfully submitted, /s/ Cyrus E. Phillips IV Cyrus E. Phillips IV Virginia State Bar Number 03135-12 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 17 of 18 May 30 th, 2013 ALBO & OBLON, L.L.P. Courthouse Plaza 2200 Clarendon Boulevard, Suite 1201 Arlington, Virginia 22201-3331 Telephone: (703) 562-3382 Facsimile: (703) 312-0415 Mobile: (703) 819-5944 Electronic Mail: lawyer@procurement-lawyer.com Attorney of record for Plaintiff, Tektel, Incorporated. - 13 -
Case 1:11-cv-00445-MCW Document 62-1 Filed 06/05/13 Page 18 of 18 CERTIFICATE OF SERVICE I hereby certify, under penalty of perjury, that on Thursday, May 30 th, 2013 a true and complete copy of this Plaintiff s Brief in Support of Plaintiff s Response to Defendants RCFC 12(b) Motions was filed electronically via the Court s Electronic Case Filing System, through which notice of this filing will be sent to: Amanda L. Tantum, Esq. Electronic Mail: Amanda.Tantum@usdoj.gov Attorney of record for Defendants, United States District Court for the Northern District of Illinois and the Administrative Office of the United States Courts. /s/ Cyrus E. Phillips IV Cyrus E. Phillips IV - 14 -