Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03749/USCOURTS-cand-3_06-cv-03749-22/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO BAY AREA RAPID

TRANSIT,

Plaintiff,

 v.

GE TRANSPORTATION SYSTEMS

GLOBAL SIGNALING LLC,

Defendant.

 /

No. C 06-03749 JSW

NOTICE OF TENTATIVE

RULING AND QUESTIONS RE

MOTIONS FOR PARTIAL

SUMMARY JUDGMENT

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD, PLEASE TAKE

NOTICE OF THE FOLLOWING TENTATIVE RULING AND QUESTIONS FOR THE

HEARING SCHEDULED ON MAY 14, 2010 AT 9:00 A.M.:

The Court has reviewed the parties’ papers and, thus, does not wish to hear the parties

reargue matters addressed in those pleadings. If the parties intend to rely on authorities not

cited in their briefs, they are ORDERED to notify the Court and opposing counsel of these

authorities reasonably in advance of the hearing and to make copies available at the hearing. If

the parties submit such additional authorities, they are ORDERED to submit the citations to the

authorities only, with reference to pin cites and without argument or additional briefing. Cf.

N.D. Civil Local Rule 7-3(d). The parties will be given the opportunity at oral argument to

explain their reliance on such authority. The Court suggests that associates or of counsel

attorneys who are working on this case be permitted to address some or all of the Court’s

questions contained herein.

Case 3:06-cv-03749-JSW Document 186 Filed 05/10/10 Page 1 of 3
United States District Court

For the Northern District of California

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The Court tentatively GRANTS Defendant’s motion for partial summary judgment and

tentatively DENIES Plaintiff’s motion for partial summary judgment.

The parties shall each have 20 minutes to address the following questions:

GETS’ Motion for Partial Summary Judgment

1. Why doesn’t the language of the Third Amended Complaint govern: “The Contract also

addresses the risks inherent in all research and development projects that seek to expand

existing technical knowledge, such as ... the market value of the technology if and when

perfected might be less than originally hoped because of the interim development of

competing technologies or other changes to the marketplace.” (FAC at ¶ 28(3).) Who

assumed that risk in the setting of the contract price and terms? See, e.g. Delta Air

Lines, Inc. v. Douglas Aircraft Co., 238 Cal. App. 2d 95, 104-05 (1965).

2. Regardless of the specific damages limitation language of the contract or its disputed

applicability, how can BART seek expectation damages for the cost of a new VehicleCentric Communications-Based Train Control system (“VC-CBTC”) when the contract

only addresses the costs, plans, and specifications based upon older technology required

for the Advanced Automatic Train Control system (“AATC”)? There is no dispute of

fact that the modern technology is better and much more expensive, although the old

technology is currently in use elsewhere. There is also no dispute that the AATC

technology, including the source code, could be made available to BART subject to the

termination provisions of the contract.

a. On what basis does BART contend GETS must be made to pay the

increased cost of the new technology when it never contracted to build

such a system?

b. If the Court finds the exclusive remedy provision (SC P8.4.1.3) does not

apply to the termination (ostensibly under P8.3), why isn’t the damages

calculation based on the estimated cost of the new system minus the

contract price? 

c. If the Court finds the exclusive remedy provision does apply, is there a

question of fact regarding whether the remedy has failed of its essential

purpose?

d. If there is an ambiguity inherent in the contract regarding whether the

expense of completion is the exclusive remedy under P8.3, does the

Court have to allow the jury to determine the issue by taking into account

factual issues such as intent of parties (at both the initiation and

termination of the contract) and custom and practice in the industry?

Southern Pac. Transp. v. Santa Fe Pac. Pipelines, Inc., 74 Cal. App. 4th

1232, 1241 (1999) (holding that extrinsic evidence may be offered when

a contract term is ambiguous on its face, but also to expose a latent

ambiguity); see also Pacific Gas & Electric Co. v. G.W. Thomas

Drayage, 69 Cal. 2d 33, 37, 40 (1968) (California law permits

introduction of parole evidence to establish contract ambiguity).

3. Is Jean-Luc Dupont offered by BART as an expert? If so, why is his disclosure not

impermissibly late? If he is not offered as an expert, on what basis does Dupont

estimate the cost of completion of the AATC project and on what basis is his estimate

admissible? (See Dupont Decl., ¶ 9.)

Case 3:06-cv-03749-JSW Document 186 Filed 05/10/10 Page 2 of 3
United States District Court

For the Northern District of California

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BART’s Motion for Partial Summary Judgment

4. BART’s response to GETS’s claim that the “change order exception” of Article P4.4

applies to its claims for damages is to state that the “argument is not supported by the

language of the contract.” (See Reply at 2.) How so? Is there a dispute of fact whether

the parties proceeded under Article P4.4 or Article P9.6 to address the same, or similar,

damages contentions? How could GETS have made its claim for damages of costs and

lots profits within 48 hours of an occurrence under P9.6.1(a)?

5. How can the Court address the factually contested issue of whether BART waived the

formal claims process in favor of informality and the process the parties actually

engaged in to resolve their differences? See Engalla v. Permanente Medical Group,

Inc., 15 Cal. 4th 951, 983 (1997).

6. In People ex rel. Dep’t of Parks and Recreation v. West-A-Rama, Inc., 35 Cal. App. 3d

786, 794 (1973), the court held that although “the filing of a claim is normally a

prerequisite to the maintenance of an action for damages against a public entity, ... when

the state sues on a contract, the defendant should be permitted to cross-complain for

damages on the same contract without complying with the claim statutes.” The West-ARama court did not make a distinction between compliance with statutory and

contractual claims requirements and, instead, based its decision on fair notice and the

opportunity of the governmental entity to investigate and settle without litigation. What

would be the basis for such a distinction here?

7. Do the parties have anything further they wish to address?

IT IS SO ORDERED.

Dated: May 10, 2010 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:06-cv-03749-JSW Document 186 Filed 05/10/10 Page 3 of 3