Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-07156/USCOURTS-caDC-01-07156-0/pdf.json

Parties Involved:
Kajima Engineering and Construction, Incorporated
Appellant
Kiska Construction Corporation
Appellant
Washington Metropolitan Area Transit Authority
Appellee

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 22, 2002 Decided March 11, 2003

No. 01-7156

KISKA CONSTRUCTION CORPORATION, U.S.A., AND

KAJIMA ENGINEERING AND CONSTRUCTION, INCORPORATED,

A PARTNER IN KISKA–KAJIMA, A JOINT VENTURE,

APPELLANTS

v.

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 97cv02677)

Kenneth W. Starr argued the cause for the appellants.

Christopher Landau and Grant M. Dixton were on brief.

Kenneth B. Weckstein argued the cause for the appellee.

Phillip T. Staub was on brief.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #01-7156 Document #737162 Filed: 03/11/2003 Page 1 of 22
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Before: GINSBURG, Chief Judge, HENDERSON, Circuit Judge,

and WILLIAMS, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Appellee

Washington Metropolitan Area Transit Authority

(‘‘WMATA’’) contracted with Appellants KiSKA Construction

Corporation–U.S.A. and Kajima Engineering and Construction, Inc. (collectively ‘‘KiSKA’’) in early 1994 to construct two

subway tunnels in Washington, D.C. for a fixed price of $43

million. After experiencing various difficulties completing the

project, KiSKA filed suit against WMATA in the United

States District Court for the District of Columbia alleging

counts of: (1) fraudulent misrepresentation; (2) negligent

misrepresentation; (3) unilateral mistake; (4) material breach

of contract; and (5) quantum meruit.

The district court dismissed KiSKA’s two tort claims—

fraudulent misrepresentation and negligent misrepresentation—for lack of subject matter jurisdiction, concluding that

WMATA had not waived its sovereign immunity from liability

for torts occurring in the performance of a governmental

function. The district court then granted summary judgment

to WMATA on KiSKA’s quantum meruit claim. After a fiveweek trial on the remaining contract claims, the jury returned

a verdict for WMATA on both counts. The district court

subsequently entered final judgment in WMATA’s favor on

March 23, 2001 and denied KiSKA’s motion for a new trial on

August 20, 2001.

On appeal, KiSKA challenges three pre-trial rulings that

the district court’s August 20, 2001 opinion and order incorporated by reference. First, KiSKA argues that the district

court erred in dismissing its tort claims on sovereign immunity grounds. Second, KiSKA argues that the district court

misinterpreted the contract’s dewatering provisions. Third,

KiSKA argues that the district court likewise misinterpreted

the contract’s grout hole provisions. We find all three of

KiSKA’s challenges to be without merit and, accordingly,

affirm the judgment of the district court.

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I. Background

A. The 14th Street Tunnel Project

This litigation arises out of the extension of WMATA’s

Green Line subway train under 14th Street in Washington,

D.C. Before soliciting bids for the tunnel project, WMATA

retained an outside technical expert, GZA GeoEnvironmental,

Inc. (‘‘GZA’’), to analyze the subsurface conditions in the

project area and to study the feasibility of various tunneling

methods, tunneling equipment and dewatering systems.1

GZA submitted its first Tunnel Alternative Report (‘‘TAR’’) in

November 1992. The first TAR reported that ‘‘[g]roundwater for most of the [tunnel] alignment is anticipated to be

above the crown [i.e., the top of the tunnel],’’ and that, in light

of this soil condition, ‘‘even TTT fairly extensive dewatering’’

was not likely to be entirely ‘‘[e]ffective.’’ Joint Appendix

(JA) 30–31. Accordingly, GZA recommended not only that

‘‘some type of closed face tunnel boring machine’’ be used for

the project, but also that ‘‘open face tunneling be strictly

prohibited on this contract.’’2

 JA 31.

GZA submitted a revised TAR in January 1993. The

second TAR reaffirmed the conclusions of the first, noting

that ‘‘dewatering considerations dictate closed face mining

methods,’’ JA 32, and that ‘‘[o]pen faced tunneling in conjunction with dewatering is not judged a viable construction

technique on this [c]ontract,’’ JA 33. After reviewing the

second TAR, WMATA’s Board of Engineers met with GZA.

Shortly thereafter, in March 1993, GZA issued a third and

final TAR, which authorized the use of an open face machine,

1 Dewatering systems use a combination of dewatering wells and

control piezometers to reduce hydrostatic pressure and to control

and remove both groundwater and surface water from the tunnel

excavation during construction.

2 An open face tunnel boring machine is ‘‘essentially a cylinder

with a digging mechanism in the center of it, much like a backhoe

that you might see on the streets of the city.’’ JA 495. A closed

face machine is also ‘‘a cylinder, but as its name describe[s], the face

is closed.’’ JA 495.

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but cautioned that ‘‘[e]xtensive dewatering will be an essential

element of the open faced shield option.’’ JA 34. Noting

that ‘‘effective dewatering of the alignment is at best going to

be difficult,’’ the third TAR recommended that ‘‘an extensive

pre-support grouting/ground improvement program TTT be

required for most of the alignment.’’3

 JA 35.

Following the issuance of the third TAR, GZA calculated

the extent of the dewatering and grouting necessary to allow

for open face tunneling. Even extensive pre-support grouting would not permit open face tunneling, GZA warned

WMATA, ‘‘if groundwater is not depressed [through dewatering] the recommended two feet below tunnel invert [i.e., the

bottom of the tunnel].’’ JA 35. WMATA then directed GZA

to design an appropriate dewatering system for the project.

GZA produced a dewatering design that included over three

hundred dewatering wells. JA 1045–46

On December 6, 1993, WMATA issued an Invitation for

Bids (‘‘IFB’’) on the 14th Street tunnel project. The IFB set

forth detailed design specifications and required bidders to

submit lump-sum bids for carrying out the work based upon

those specifications.4

 WMATA did not include GZA’s TARs

in the bid package, however, nor did WMATA conform the

design specifications to GZA’s recommended dewatering system. In particular, WMATA’s design specifications called for

only 61 dewatering wells. JA 40. Based upon the specifications provided by WMATA, KiSKA submitted a lump-sum bid

of approximately $43 million. WMATA accepted KiSKA’s bid

and, in early 1994, the two parties signed a construction

contract.

3 ‘‘Pre-support grouting involves drilling holes into the ground in

a regular pattern, and then filling them with a fluid mixture of

cement, water, and chemicals, which spreads out into the soil and

hardens to form a stable, continuous canopy over the tunnel.’’ Br.

for Appellant at 8.

4 A design specification describes in precise detail the materials to

be employed and the manner in which the construction work is to

be performed. P.R. Burke Corp. v. United States, 277 F.3d 1346,

1357 (Fed. Cir. 2002).

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B. The Dewatering and Grout Hole Provisions

Section 205 of the contract governed dewatering. It not

only set forth a detailed dewatering system for the project,

but also required KiSKA to implement the system specified

therein: ‘‘The Contractor shall proceed with the installation

of the specified dewatering system as soon as possible after

notice to proceed.’’ Contract § 205, ¶ 1.1(A). Two subsections touched on the question whether the contract required

the dewatering system to maintain the groundwater level at

two feet below tunnel invert. Section 205(1.2)(B)(3) read, in

pertinent part, as follows:

For mined earth tunnels, additional wells beyond the

specified minimum dewatering system may be required to effectively reduce hydrostatic pressure and

control groundwater in soil surrounding each tunnel

in order to prevent the following:

a. Heaving of the invert, blowups, hazardous

seepage and sudden flow of soil in tunnel face.

b. Loss of ground and surface subsidence.

c. Maintain groundwater 2 feet below invert.

Id. § 205, ¶ 1.2(B)(3). Section 205(1.1)(A) also addressed

dewatering, stating that ‘‘[t]he designed dewatering system

may not eliminate all groundwater from the tunnel excavation. The Contractor shall be prepared to support the tunnel

face TTT and to handle and convey groundwater from the

tunnel to appropriate discharge locations.’’ Id. § 205,

¶ 1.1(A). This subsection further provided that ‘‘[a]dditional

dewatering wells may be required based on the observed

performance of the dewatering system.’’ Id.

Section 239 of the contract covered pre-support chemical

grouting, specifying the precise location of thousands of surface pre-support grout holes to stabilize the soil around the

tunnels. In particular, Section 239(1.1)(B) provided that

‘‘[p]re-support chemical grouting shall be preformed [sic]

from the existing ground surface at locations shown on the

contract drawings.’’ Id. § 239, ¶ 1.1(B). Although these

drawings depicted grout holes drilled vertically at five-foot

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intervals in a diamond grid pattern, see JA 1001, Section

239(3.2)(A) stated that grout piping should be installed ‘‘horizontally, vertically or inclined, as required,’’ Contract § 239,

¶ 3.2(A). ‘‘In [the] case of [a] discrepancy between Drawings

and Specifications,’’ the contract’s General Provisions provided that ‘‘the Specifications shall govern.’’ JA 755.

C. The Pre–Trial Rulings

During the tunnel’s construction, KiSKA experienced a

number of difficulties with both the dewatering system and

the excavation methods required by the contract. Two complications proved particularly troublesome: (1) the dewatering system specified by WMATA failed to lower the groundwater table two feet below the tunnel invert and (2) the great

majority of surface grout holes could not be drilled vertically

at their specified locations without damaging underground

utility lines. Although KiSKA overcame these difficulties and

eventually completed the project, it did so at a cost of almost

double its $43 million lump-sum bid. Upon completion of the

project, KiSKA filed a five-count complaint against WMATA

asserting both tort and contract claims.

Before the case went to trial, the district court issued

several pre-trial rulings, three of which KiSKA now challenges on appeal. First, the district court dismissed KiSKA’s

tort claims on sovereign immunity grounds, holding that ‘‘the

challenged decisions are ‘susceptible to policy judgment,’ and

therefore immune from judicial review, because they involve

planning and design rather than implementation or operation.’’ KiSKA Constr. Corp. v. WMATA, Civ. No. 97–2677 at

5 (D.D.C. Feb. 7, 2000) (mem.) (First Order). Second, the

district court held that the contract was ‘‘ambiguous, but not

patently so,’’ with respect to whether the contract required

that the dewatering system maintain the groundwater level at

two feet below tunnel invert. KiSKA Constr. Corp. v.

WMATA, Civ. No. 97–2677 at 7 (D.D.C. June 9, 2000) (mem.)

(Second Order).5

 Third, the district court held that while

5 The district court reached this conclusion in the course of

rejecting WMATA’s motion for partial summary judgment, which

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‘‘the contract affords no flexibility with regard to the locations of grout drillings,’’ KiSKA Constr. Corp. v. WMATA,

Civ. No. 97–2677 at 8 (D.D.C. Dec. 22, 2000) (mem.) (Third

Order) (emphasis in original), the contract permitted KiSKA

‘‘to drill all grout holes, including surface grout holes, ‘horizontally, vertically or inclined,’ ’’ id. at 9 (quoting Contract

§ 239, ¶ 3.2(A)).6

II. Analysis

We review de novo the dismissal of KiSKA’s tort claims for

lack of subject matter jurisdiction, accepting as true all of the

factual allegations contained in the complaint.7

 Sturm, Ruger

had asked the district court to ‘‘rule as a matter of law that the

contract did not require that the dewatering system lower the

groundwater to two feet below the bottom of the tunnel.’’ Second

Order at 1.

6 The district court addressed whether the contract mandated the

vertical drilling of grout holes in the course of rejecting WMATA’s

argument that the contract’s ‘‘utilities clause’’ rendered WMATA

immune from liability. Third Order at 1–9. The utilities clause

provided, in pertinent part, as follows:

a. TTT The Contract Drawings show some known public

and private utilities in their approximate locations within

the limits of the project which are expected to interfere

with the work. The Contractor is, however, cautioned that

these locations are not guaranteed, nor is there any guarantee that utilities lines in existence within the limits of the

project have been shownTTT.

b. TTT Before commencing construction, the Contractor

shall verify the locations of utilities which may be affected

by his operationsTTT.

Contract § 101, ¶ III(D)(18).

7 Relying on Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192,

197–98 (D.C. Cir. 1992), WMATA argues that we should consider

facts outside of the pleadings in reviewing the district court’s

dismissal of KiSKA’s tort claims. We disagree. Under settled law,

the district court may dispose of a motion to dismiss for lack of

subject matter jurisdiction ‘‘on the complaint standing alone.’’ Id.

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& Co. v. Chao, 300 F.3d 867, 871 (D.C. Cir. 2002). We review

the district court’s construction of the contract between

KiSKA and WMATA under the same de novo standard. LTV

Corp. v. Gulf States Steel, Inc., 969 F.2d 1050, 1055 (D.C.

Cir.), cert. denied, 506 U.S. 1022 (1992) (‘‘Interpretation of the

plain language of a contract is a question of law subject to de

novo review by this court.’’).

A. Sovereign Immunity

On appeal, KiSKA argues that the district court erred by

dismissing its two tort claims—fraudulent misrepresentation

and negligent misrepresentation—on sovereign immunity

at 197. Nevertheless, where necessary, the district court may also

consider undisputed facts evidenced in the record or disputed facts

resolved by the district court. Id. As we explained in Herbert,

however, ‘‘[t]he posture in which the motion is presented to [the]

trial court has a profound effect on the manner in which this Court

will review its disposition.’’ Id.

 The district court’s February 7, 2000 Memorandum Opinion

dismissing KiSKA’s tort claims indicates—in a footnote—that ‘‘[a]

more thorough summary of the facts of this case can be found in the

Court’s Memorandum Opinion of June 19, 1998.’’ First Order at 2

n.2. This earlier opinion, which denied WMATA’s first motion to

dismiss, ‘‘deduced’’ certain jurisdictional facts ‘‘as presented in the

[c]omplaint and the contract.’’ KiSKA Constr. Corp. v. WMATA,

Civ. No. 97–2677 at 2 (D.D.C. June 19, 1998) (mem.). WMATA

relies upon the district court’s ‘‘incorporation’’ of the previously

‘‘deduced’’ facts in support of its position that the district court

looked beyond the four corners of the complaint in dismissing

KiSKA’s tort claims on sovereign immunity grounds. WMATA is

mistaken. A review of the district court’s February 7, 2000 Memorandum Opinion reveals that the district court made no determination of disputed jurisdictional facts in holding that KiSKA’s tort

claims involved discretionary decisions evincing policy judgment

and, as a result, that the claims were barred by sovereign immunity.

First Order at 3–7. Given that the district court accepted as true

the factual allegations of the complaint, see id. at 1–7, ‘‘the only

matter[ ] before us on appeal [is] whether the [d]istrict [c]ourt’s

application of the law is correct,’’ Herbert, 974 F.2d at 197.

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grounds. Rejecting the district court’s conclusion that

WMATA had ‘‘broad discretion in defining the contours of the

invitation for bids,’’ First Order at 6, KiSKA asserts that

WMATA lacks the ‘‘ ‘discretion’ to conceal and/or misrepresent material information’’ from contractors and that ‘‘such

tortious conduct does not involve the exercise of a ‘policy

judgment,’ ’’ Br. for Appellant at 20. Thus, KiSKA maintains, sovereign immunity does not shield WMATA from

KiSKA’s tort claims.

1. Discretionary Functions vs. Ministerial Functions

WMATA is the product of an interstate compact entered

into by Maryland, Virginia and the District of Columbia.

Watters v. WMATA, 295 F.3d 36, 39 (D.C. Cir. 2002). We

have frequently recognized that, ‘‘ ‘[a]s a quasi-governmental

entity created by its signatory parties, WMATA is entitled to

share the sovereign immunity of those parties with respect to

common law tort actions.’ ’’ Beatty v. WMATA, 860 F.2d

1117, 1126 (D.C. Cir. 1988) (quoting Heffez v. WMATA, 569 F.

Supp. 1551, 1552 (D.D.C. 1983)). We have also acknowledged, however, that section 80 of the WMATA Compact

provides a limited waiver of WMATA’s sovereign immunity

for torts ‘‘ ‘committed in the conduct of any proprietary

function,’ ’’ but not for torts occurring ‘‘ ‘in the performance of

a governmental function.’ ’’ Beebe v. WMATA, 129 F.3d 1283,

1287 (D.C. Cir. 1997) (quoting D.C. CODE ANN.

§ 9–1107.01(80)). Unless the limited waiver of immunity

applies, ‘‘the district court lacks jurisdiction to enter a judgment against [WMATA].’’ Watters, 295 F.3d at 39–40.

Because ‘‘the distinction between proprietary and governmental functions has created a ‘quagmire that has long

plagued the law of municipal corporations,’ ’’ Beatty, 860 F.2d

at 1126 (quoting Indian Towing Co. v. United States, 350

U.S. 61, 65 (1955)), we have interpreted section 80 ‘‘as incorporating the distinction between discretionary and ministerial

functions,’’ a dichotomy set forth in the Federal Tort Claims

Act (‘‘FTCA’’), Dant v. District of Columbia, 829 F.2d 69, 74

(D.C. Cir. 1987). Given that ‘‘[o]nly those activities considUSCA Case #01-7156 Document #737162 Filed: 03/11/2003 Page 9 of 22
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ered ‘discretionary’ are shielded by sovereign immunity,’’

Burkhart v. WMATA, 112 F.3d 1207, 1216 (D.C. Cir. 1997),

WMATA’s immunity ‘‘turns on whether the [challenged] activity is ‘discretionary’ or ‘ministerial,’ ’’ Beebe, 129 F.3d at

1287.8

To determine whether a WMATA activity is discretionary,

and thus shielded by sovereign immunity, we apply a two-part

test culled from the FTCA’s ‘‘discretionary function’’ jurisprudence.9

 See id. First, we ask ‘‘whether any ‘ ‘‘statute, regulation, or policy specifically prescribes a course of action for

an employee to follow.’’ ’ ’’ Id. (quoting Cope v. Scott, 45 F.3d

445, 448 (D.C. Cir. 1995) (quoting United States v. Gaubert,

499 U.S. 315, 322 (1991))). If a course of action is so

prescribed, ‘‘sovereign immunity does not bar suits based on

an employee’s failure to follow the prescribed course of

conduct.’’ Burkhart, 112 F.3d at 1217. If the governing

statutes or regulations leave room for the exercise of discretion, however, we ask a second question: ‘‘whether the exercise of discretion is ‘grounded in ‘‘social, economic, or political

goals.’’ ’ ’’ Beebe, 129 F.3d at 1287 (quoting Cope, 45 F.3d at

448 (quoting Gaubert, 499 U.S. at 323)). If the exercise of

discretion is so grounded, and hence ‘‘susceptible to policy

judgment,’’ Cope, 45 F.3d at 448, the ‘‘activity is ‘governmen8 WMATA’s sovereign immunity likewise extends to ‘‘quintessential’’ governmental functions, such as law enforcement. Beebe, 129

F.3d at 1287. Indeed, we typically ask whether the challenged

activity amounts to a ‘‘quintessential’’ governmental function before

asking whether the activity is ‘‘discretionary’’ or ‘‘ministerial.’’ See

id. We need not ask the former question here, however, because

‘‘WMATA has not attempted to shoe-horn its activities into this

narrow category of conduct.’’ First Order at 4 n.4.

9 We have described the distinction between ‘‘discretionary’’ and

‘‘ministerial’’ functions as follows: ‘‘ ‘Generally speaking, a duty is

discretionary if it involves judgment, planning, or policy decisions.

It is not discretionary [i.e., ministerial] if it involves enforcement or

administration of a mandatory duty at the operational level, even if

professional expert evaluation is required.’ ’’ Beatty, 860 F.2d at

1127 (emphasis in original) (quoting Jackson v. Kelly, 557 F.2d 735,

737–38 (10th Cir. 1977)).

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tal,’ thus falling within section 80’s retention of sovereign

immunity,’’ Beebe, 129 F.3d at 1287.

2. The Contents of the Bid Package:

A Discretionary Decision?

This case poses the following question: does WMATA’s

discretion to select a particular project design encompass the

discretion to determine the content of that project’s bid

package?10 On appeal, KiSKA answers this question in the

negative, arguing that (1) WMATA lacks the discretion to

‘‘conceal and/or misrepresent material information’’ from contractors and (2) ‘‘such tortious conduct does not involve the

exercise of a ‘policy judgment.’ ’’ Br. for Appellant at 20.11

10 Not surprisingly, the parties disagree as to whether KiSKA’s

tort claims amount to a challenge to WMATA’s design decisions.

This dispute reflects the fact that we have long held that WMATA’s

design decisions are discretionary functions shielded by sovereign

immunity. See, e.g., Souders v. WMATA, 48 F.3d 546 (D.C. Cir.

1995) (WMATA immune from challenge to noise level guidelines);

Dant, 829 F.2d at 73–75 (WMATA immune from challenge to fare

collection system). A careful reading of the complaint reveals,

however, that KiSKA’s tort claims stem from WMATA’s decision

not to include GZA’s three TARs in the bid package and not

WMATA’s decision to select a particular project design over another. JA 24–66.

 KiSKA’s reliance upon Beatty is similarly misplaced. Although

Beatty recognized that WMATA may be held ‘‘liable for a broad

range of conduct which implements its discretionary decisions,’’

Beatty, 860 F.2d at 1127, the case involved the implementation of a

design decision, i.e., the Red Line’s uninstalled iron beams. It thus

sheds no light on whether WMATA’s selection of a particular bid

package is more properly cast as a ‘‘design’’ decision or as an

‘‘implementation’’ decision.

11 Noting that the FTCA contains both a ‘‘discretionary function’’

exception and a ‘‘misrepresentation’’ exception to the waiver of

sovereign immunity contained therein, whereas the WMATA Compact includes only the former, KiSKA also argues that section 80

does not afford WMATA immunity from tort suits alleging claims of

misrepresentation. But, as WMATA correctly observes, we have

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Applying the two-stage analysis outlined above, see supra

Part II.A.1, we find that KiSKA has failed to cite any statute,

regulation or policy that ‘‘specifically prescribes’’ the content

of WMATA’s IFBs. Unable to identify support for its position within the four corners of the WMATA Compact, KiSKA

relies upon two external sources of authority to argue that

WMATA failed, in this case, to follow the prescribed course of

conduct: (1) contract cases that recognize a government

agency’s duty to disclose pertinent facts to contractors with

whom the agency contracts, Br. for Appellant at 23–24, and

(2) a Federal Transit Administration (‘‘FTA’’) circular providing that all contract solicitations must ‘‘ ‘[i]ncorporate a clear

and accurate description of the technical requirements for the

material, product, or service to be procured,’ ’’ id. at 24

(quoting JA 1068).

KiSKA maintains that the general obligation to abide by

the covenant of good faith and fair dealing ‘‘specifically prescribed’’ the contents of the bid package, requiring WMATA

to disclose to KiSKA all ‘‘material’’ information. We disagree. Although the covenant of good faith and fair dealing

undoubtedly constrains WMATA’s behavior within the context of its contractual relationships, KiSKA’s misrepresentation claims sound in tort, not contract. Given that section 80

distinguishes between tort claims and contract claims, affording a limited waiver of sovereign immunity with respect to the

former and a complete waiver of sovereign immunity with

respect to the latter, D.C. CODE ANN. § 9–1107.01(80), we

must agree with the district court’s conclusion that the covenant of good faith and fair dealing ‘‘is not the kind of specific

dictate that renders WMATA’s acts merely ministerial,’’ First

Order at 6 (emphasis in original). Cf. Burkhart, 112 F.3d at

1217 (holding that employment provisions of WMATA Compact ‘‘hardly constrain’’ WMATA’s discretion over whom it

will employ and how it will train and supervise employees).

previously upheld the dismissal of fraud and misrepresentation

claims against WMATA where the challenged activities involved

discretionary decisions. See Beebe, 129 F.3d at 1286, 1288.

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The FTA circular likewise fails to circumscribe WMATA’s

discretion with respect to the contents of the bid package.12

A regulation constrains discretion if it ‘‘ ‘specifically prescribes a course of action for an employee to follow’ ’’ such

that ‘‘ ‘the employee has no rightful option but to adhere to

the directive.’ ’’ Gaubert, 499 U.S. at 322 (quoting Berkovitz

v. United States, 486 U.S. 531, 536 (1988)). Although the

FTA circular obligates WMATA to ‘‘[i]ncorporate a clear and

accurate description of the technical requirements for the

material, product, or service to be procured,’’ JA 1068, the

circular does not ‘‘specifically prescribe’’ a course of action for

WMATA to follow in specifying the contents of a bid package.

In our view, an administrative ukase that mandates only

clarity and accuracy does not constrain WMATA’s discretion

with respect to the particular documents to include within a

bid package. Cf. Appalachian Power Co. v. EPA, 208 F.3d

1015, 1023 (D.C. Cir. 2000). Given KiSKA’s failure to produce persuasive authority to the contrary, we conclude that

WMATA had broad discretion to determine the contents of

the tunnel project’s bid package.13

Next, KiSKA argues that WMATA cannot satisfy the second step of the sovereign immunity inquiry, i.e., whether the

exercise of such discretion is ‘‘grounded in social, economic, or

political’’ policy. Cope, 45 F.3d at 448 (internal quotations

omitted). As we recognized in Cope, ‘‘[d]etermining whether

a decision is ‘essentially political, social, or economic’ is admittedly difficult, since nearly every government action is, at

least to some extent, subject to ‘policy analysis.’ ’’ Id. (quot12 Although WMATA claims that KiSKA did not rely upon the

FTA circular before the district court, the record indicates otherwise. JA 135. Accordingly, KiSKA has not waived this argument.

13 As WMATA correctly observes, at least one court has expressly held that government decisions regarding the content of plans

and specifications provided to contractors are immune discretionary

functions. See Frank Briscoe Co. v. County of Clark, 643 F. Supp.

93, 97–98 (D. Nev. 1986), aff’d, 857 F.2d 606 (9th Cir. 1988)

(interpreting discretionary function exemption under Nevada law in

accordance with FTCA principles). Unfortunately, the Frank Briscoe decision contains little reasoning in support of its decision. See

id.

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ing Red Lake Band of Chippewa Indians v. United States,

800 F.2d 1187, 1195 (D.C. Cir. 1986)). ‘‘ ‘Budgetary constraints,’ ’’ we observed, ‘‘ ‘underlie virtually all economic activity.’ ’’ Id. at 449 (quoting ARA Leisure Servs. v. United

States, 831 F.2d 193, 196 (9th Cir. 1987)).

To avoid the exception swallowing the rule, we have held

that the ‘‘mere association of a decision with regulatory

concerns is not enough [to render that decision ‘discretionary’]; exempt decisions are those ‘fraught with TTT public

policy considerations.’ ’’ Id. (quoting Sami v. United States,

617 F.2d 755, 767 (D.C. Cir. 1979)). We therefore concluded

in Cope that ‘‘[t]he mere presence of choice—even if that

choice involves whether money should be spent—does not

trigger the [discretionary function] exemption.’’ Id.

WMATA argues that its ‘‘employees had to, and did, exercise judgment when they decided that the [bid package]

would not benefit from [the] inclusion of superseded, discarded design concepts.’’ Br. for Appellee at 31. Citing the

court’s decision in Red Lake, WMATA maintains that its

decisions regarding the manner in which its policies are

implemented or enforced are ‘‘themselves discretionary because such decisions directly affect the feasibility and practicality of the program, and require the agency to establish

priorities for the accomplishment of its policy objectives by

balancing the objectives sought to be obtained against such

practical considerations as staffing and funding.’’ Id. at 31–

32 (quoting Red Lake, 800 F.2d at 1196 (internal quotations

omitted)). WMATA thus reasons that its ‘‘decision not to

include thousands of pages of draft or superseded design

documents in the bid package is a perfect example of such

discretion.’’ Id. at 32.

While KiSKA’s claim presents a closer question than those

decided in cases past, we believe that the district court

correctly held that WMATA’s discretionary decision to exclude certain design documents from the tunnel project’s bid

package is ‘‘susceptible to policy judgment.’’ Cope, 45 F.3d at

448. Specifically, WMATA’s decision required consideration

of budgetary constraints and economic expediency. While at

first glance WMATA’s fiscal considerations may appear to

pale in comparison to those implicated in hiring decisions, see

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15

Beebe, 129 F.3d at 1287–88; Burkhart, 112 F.3d at 1217,

those considerations involve more than simply packaging,

duplication and distribution costs. If WMATA were to release unreliable or mistaken reports indicating an inflated

need for dewatering wells, for example, the reports could

cause contractors to similarly inflate their bids. Of course,

WMATA may not withhold all unfavorable information from

contractors; if it did, WMATA might soon find few firms

willing to submit bids on its projects. WMATA must therefore exercise its policy judgment to balance the goal of fair

disclosure against the sensible withholding of unreliable information.

Although KiSKA argues that WMATA’s position ‘‘assumes

the merits of the issue, i.e., that the information concealed

from bidders was not ‘material,’ ’’ Reply Br. at 9 (emphasis in

original), KiSKA’s position, in contrast—given that the merits

of a claim will rarely be known before a court establishes its

jurisdiction over that claim—would permit endless contractor

challenges to WMATA’s final specifications. While KiSKA

may disagree with WMATA’s decisions regarding the materiality of a given set of documents, such judgments are, in our

view, WMATA’s to make. We therefore conclude that the

content of the tunnel project’s bid package is a discretionary

decision susceptible to policy judgment and, accordingly, affirm the district court’s dismissal of KiSKA’s tort claims on

sovereign immunity grounds.14

B. The Contract Provisions

KiSKA’s remaining challenges involve the district court’s

interpretation of two contract provisions: section 205 (dewatering) and section 239 (pre-support grouting). Both challenges rely upon United States v. Spearin, 248 U.S. 132

(1918), ‘‘[t]he seminal case recognizing a cause of action for

breach of contractual warranty of specifications,’’ Hercules

14 Given our conclusion that the district court correctly dismissed

KiSKA’s tort claims on sovereign immunity grounds, we need not

consider WMATA’s alternative argument that the district court’s

dismissal of KiSKA’s tort claims constituted ‘‘harmless error.’’

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16

Inc. v. United States, 516 U.S. 417, 424 (1996), which held

that ‘‘if [a] contractor is bound to build according to plans and

specifications prepared by the owner, the contractor will not

be responsible for the consequences of defects in the plans

and specifications,’’ Spearin, 248 U.S. at 136. Relying on

Spearin, KiSKA argues that WMATA warranted by implication that (1) its dewatering system would lower the groundwater table in the project area two feet below the tunnel

invert and (2) the surface pre-support grout holes required

under the contract could be drilled vertically at the precise

locations specified by WMATA.

1. The Dewatering System

KiSKA maintains that the district court erred as a matter

of law in holding that the contract was ‘‘ambiguous’’ as to

whether the contract required—and thus warranted—that the

dewatering system would lower the groundwater table in the

project area two feet below the tunnel invert. Relying chiefly

on section 205(1.2)(B)(3), KiSKA argues that the contract

specifically and unambiguously warranted that the groundwater table would be lowered two feet below the invert of the

tunnel by the dewatering system WMATA designed. In

KiSKA’s view, none of the provisions relied on by WMATA

abrogates the ‘‘clear’’ statement contained in section

205(1.2)(B)(3) and, accordingly, KiSKA claims that its reading

of the contract provides the only ‘‘reasonable’’ interpretation

of the dewatering provisions contained therein. Its argument

fails.

Section 205(1.2)(B)(3) provided that ‘‘[f]or mined earth tunnels, additional wells beyond the specified minimum dewatering system may be required to TTT control groundwater in

[the] soil surrounding each tunnel in order to TTT [m]aintain

groundwater 2 feet below invert.’’ Contract § 205, ¶ 1.2(B)(3)

(emphasis added). Noting that the groundwater table could

not be ‘‘maintain[ed]’’ two feet below the tunnel invert if it

was not already at that level, KiSKA asserts that section 205

required, and hence warranted, that WMATA’s dewatering

system would indeed lower the groundwater table to two feet

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17

below tunnel invert. In KiSKA’s view, its reading of section

205(1.2)(B)(3) is confirmed by section 228(1.5)(A)(2)(a)((1)),

which provided: ‘‘The water table shall be lowered as specified in the Specification Section 205.’’ Id. § 228,

¶ 1.5(A)(2)(a)((1)) (emphasis added).

WMATA, however, reads section 205(1.2)(B)(3) not as an

implied warranty but as ‘‘a statement that the minimum

dewatering system might not lower the groundwater to two

feet below invert [and that KiSKA] might have to install

additional wells to accomplish that goal.’’ Br. for Appellee at

40 (emphasis in original).15 According to WMATA, section

205(1.1)(A) likewise put KiSKA on notice that groundwater

may remain in the tunnel despite the dewatering system.

Contract § 205, ¶ 1.1(A) (‘‘The designed dewatering system

may not eliminate all groundwater from the tunnel excavation.’’). WMATA further asserts that both section

228(1.5)(A)(1) and section 228(3.5)(A) suggest that groundwater could remain above the tunnel invert without violating the

contract. Id. § 228, ¶ 1.5(A)(1) (providing that KiSKA must

‘‘[c]ontrol groundwater along the tunnel alignment and within

the tunnel heading to prevent’’ certain specified events from

occurring) (emphasis added); id. § 228, ¶ 3.5(A) (‘‘If the

tunnel invert is below groundwater level, [KiSKA must] maintain qualified personnel on duty to monitor conditions that

might threaten stability of heading whenever tunnel excavation is suspended or shut down.’’) (emphasis added).

The law requires contracts to be read as a whole, with

meaning given to every provision contained therein. See Fort

15 WMATA also maintains that KiSKA waived any challenge to

the district court’s ruling that the dewatering provisions were

ambiguous because KiSKA never made its own motion seeking a

ruling that the contract was unambiguous. This argument is without merit. Although the district court ruled on WMATA’s motion

for summary judgment, both KiSKA and WMATA argued that they

offered the only reasonable interpretation of the contract’s dewatering provisions. Second Order at 5. As KiSKA correctly observes,

once the district court held that the contract was ‘‘ambiguous’’ in

this regard, KiSKA did not need to file its own motion for summary

judgment in order to preserve the issue for appeal.

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18

Sumter Tours, Inc. v. Babbitt, 202 F.3d 349, 357 (D.C. Cir.

2000) (citing United States v. Ins. Co. of N. Am., 83 F.3d

1507, 1511 (D.C. Cir. 1996) (noting the ‘‘ ‘cardinal principle of

contract construction: that a document should be read to give

effect to all its provisions’ ’’) (quoting Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63 (1995))). If the

contract ‘‘is susceptible to more than one reasonable interpretation,’’ however, the court must find that the contract is

ambiguous as a matter of law. Metric Constructors, Inc. v.

NASA, 169 F.3d 747, 751 (Fed. Cir. 1999).

If the court finds the contract to be ambiguous, it must

then determine whether that ambiguity is patent or latent.

Id. An ambiguity is patent if it is ‘‘glaring, substantial, or

patently obvious.’’ Comtrol, Inc. v. United States, 294 F.3d

1357, 1365 (Fed. Cir. 2002). Patent ambiguities are construed

against a government contractor absent an inquiry ‘‘about the

correct meaning of the terms at issue.’’ P.R. Burke Corp. v.

United States, 277 F.3d 1346, 1353 (Fed. Cir. 2002). If the

ambiguity is ‘‘neither glaring nor substantial nor patently

obvious,’’ Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990,

997 (Fed. Cir. 1996) (internal quotations omitted), however,

and therefore latent, the ambiguity is ordinarily construed

against the drafting party, see, e.g., Jowett, Inc. v. United

States, 234 F.3d 1365, 1368 & n.2 (Fed. Cir. 2000).

Applying these principles, the district court concluded that

both KiSKA and WMATA proposed reasonable interpretations of the contract’s dewatering provisions, holding the

contract to be ‘‘ambiguous, but not patently so.’’ Second

Order at 7. We disagree and find the provisions to be

patently—not latently—ambiguous.

Although KiSKA provides a sensible explanation for each of

the provisions relied upon by WMATA,16 we do not accept

16 Responding to WMATA’s reliance on section 205(1.1)(A),

KiSKA argues that ‘‘[a] recognition that the system might not

eliminate every last isolated pocket of groundwater from the project

area TTT is in no way inconsistent with a warranty that the design

would lower the overall groundwater table for the project area two

feet below the invert.’’ Br. for Appellant at 33 (emphasis in

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19

KiSKA’s assertion that section 205(1.2)(B)(3) provided a

‘‘clear’’ statement that WMATA warranted that its design

would lower the groundwater table two feet below tunnel

invert. The grammatical difficulties of the provision aside,

see infra note 17, section 205(1.2)(B)(3) cannot, in our opinion,

carry the interpretive weight placed upon it by KiSKA.

Contract § 205, ¶ 1.2(B)(3). Section 228(1.5)(A)(2)(a)((1)) likewise fails to advance KiSKA’s cause as it appears to speak to

the manner of dewatering and not to the level at which the

groundwater must be maintained. Id. § 228,

¶ 1.5(A)(2)(a)((1)).

In our view, the grammatical errors of section

205(1.2)(B)(3) render the ambiguity of the dewatering provisions sufficiently obvious that KiSKA had a duty to inquire as

to the true meaning of the contract.17 See P.R. Burke Corp.,

277 F.3d at 1353. By failing to so inquire, KiSKA assumed

the risk that the government would offer a reasonable, but

conflicting, interpretation, see Triax Pacific, Inc. v. West, 130

F.3d 1469, 1474–75 (Fed. Cir. 1997), which interpretation

would then be accepted by the court—a risk realized by our

rejection of KiSKA’s claim, see Jowett, 234 F.3d at 1368 & n.2.

2. Pre–Support Grout Holes

Finally, KiSKA argues that the district court erred as a

matter of law by holding that, while ‘‘the contract affords no

flexibility with regard to the locations of grout drillings,’’

Third Order at 8 (emphasis in original), the contract ‘‘permitted [KiSKA] to drill all grout holes, including surface grout

original). Similarly, discussing WMATA’s reliance on section

228(3.5)(A), KiSKA asserts that the provision ‘‘merely anticipated a

contingency in the event that the groundwater table were to rise

above the invert.’’ Id.

17 As WMATA observes on appeal, the applicability of the verb

‘‘prevent’’ to section 205(1.2)(B)(3)(c) ‘‘makes no sense grammatically or syntactically.’’ Br. for Appellee at 40 n.15. KiSKA maintains,

however, that ‘‘[r]ead in context, it is perfectly clear that the verb

‘prevent’ does not apply to the clause beginning ‘[m]aintain.’ ’’

Reply Br. at 18 n.6.

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holes, ‘horizontally, vertically or inclined,’ ’’ id. at 9 (quoting

Contract § 239, ¶ 3.2(A)). Specifically, KiSKA maintains that

the contract specified that ‘‘all such grout holes must be

drilled vertically.’’ Br. for Appellant at 37–38. Because

KiSKA could not drill the surface grout holes vertically at

many of the locations specified in the contract without drilling

into existing utilities, KiSKA reasons that WMATA breached

its contractual warranty of specifications. We reject KiSKA’s

argument.

Section 239(1.1)(B) provided that ‘‘[p]re-support chemical

grouting shall be preformed [sic] from the existing ground

surface at locations shown on the contract drawings.’’ Contract § 239, ¶ 1.1(B). As even WMATA concedes, the contract drawings depicted the surface grout holes as drilled

vertically. See JA 1001. Yet section 239(3.2)(A) provided

that grout pipes were to be installed ‘‘horizontally, vertically

or inclined, as required.’’ Contract § 239, ¶ 3.2(A). Observing that the contract contained ‘‘no clear directive that the

[surface grout] holes should be drilled at a particular angle,’’

the district court concluded that ‘‘the flexible language of

[section 239(3.2)(A)] applies.’’ Third Order at 8–9. Accordingly, the district court held that ‘‘the contract permitted

[KiSKA] to drill all grout holes, including surface grout holes,

‘horizontally, vertically or inclined.’ ’’ Id. at 9 (quoting Contract § 239, ¶ 3.2(A)).

On appeal, KiSKA argues that the district court’s reliance

upon section 239(3.2)(A) was misplaced because the provision

‘‘did not remotely purport to override any other provisions of

the contract requiring particular grout holes to be drilled at

particular angles.’’ Br. for Appellant at 40. KiSKA places

particular emphasis upon the fact that section 239(3.2)(A)

provided that ‘‘the contractor shall drill grout holes ‘as required.’ ’’ Id. at 41 (quoting Contract § 239, ¶ 3.2(A)). Because the contract drawings depicted the grout holes as

drilled vertically, KiSKA argues that the contract ‘‘required’’

the surface grout holes to be drilled vertically, thus warranting that the surface grout holes could be drilled vertically.

USCA Case #01-7156 Document #737162 Filed: 03/11/2003 Page 20 of 22
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We find that KiSKA’s reading of the contract places too

much emphasis on the contract drawings, while ignoring

other crucial provisions of the contract. As WMATA correctly observes, General Provision No. 2 of the contract clearly

stated that ‘‘[i]n [the] case of [a] discrepancy between Drawings and Specifications, the Specifications shall govern.’’ JA

755. Given that the contract unambiguously indicated that

WMATA did not know the location of the utilities and, in

addition, expressly assigned KiSKA the responsibility of ultimately locating the utilities, KiSKA’s reading of the contract

cannot stand. See, e.g., Contract § 101, ¶ III(D)(18)(a) (‘‘The

Contract Drawings show some known public and private

utilities in their approximate locations within the limits of the

project which are expected to interfere with the work. The

Contractor is, however, cautioned that these locations are not

guaranteed, nor is there any guarantee that utilities lines in

existence within the limits of the project have been shown.’’);

id. § 101, ¶ III(D)(18)(b) (‘‘Before commencing construction,

the Contractor shall verify the locations of utilities which may

be affected by his operations.’’); id. § 207, ¶ 1.5(A)(2) (‘‘[The

contractor must] [v]erify by field investigation locations of

[utility] facilities within and adjacent to limits of project which

may be affected by construction operations.’’). Read in conjunction with section 239(3.2)(A)’s mandate to drill surface

grout holes ‘‘horizontally, vertically or inclined, as required,’’

id. § 239, ¶ 3.2(A), the aforementioned provisions sufficiently

refute KiSKA’s warranty argument.18

III. Conclusion

For the foregoing reasons, we conclude that (1) sovereign

immunity bars KiSKA’s tort claims; (2) the contract did not

unambiguously provide that the specified dewatering system

would maintain the groundwater level two feet below tunnel

invert; and (3) the contract did not require KiSKA to drill

18 Because we conclude that the district court correctly interpreted the contract’s dewatering and grout hole provisions, we need not

consider WMATA’s alternative argument that any error the district

court committed in interpreting the contract was harmless.

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surface grout holes vertically. The judgment below is therefore

Affirmed.

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