Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-16-01042/USCOURTS-ca13-16-01042-0/pdf.json

Parties Involved:
Department of Veterans Affairs
Appellee
Western States Federal Contracting, LLC
Appellant

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

WESTERN STATES FEDERAL CONTRACTING, 

LLC,

Appellant

v.

DEPARTMENT OF VETERANS AFFAIRS,

Appellee

______________________ 

2016-1042

______________________ 

Appeal from the Civilian Board of Contract Appeals in 

No. CBCA 4612(3359)-REM, Administrative Judge Patricia J. Sheridan.

______________________ 

Decided: July 15, 2016

______________________ 

ROBERT J. BERENS, Salamirad Morrow Timpane & 

Dunn LLP, Phoenix, AZ, argued for appellant. 

ELIZABETH ANNE SPECK, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for appellee. Also 

represented by BENJAMIN C. MIZER, ROBERT E.

KIRSCHMAN, JR., PATRICIA M. MCCARTHY; DAVID G. FAGAN, 

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2 WESTERN STATES FEDERAL v. DVA

United States Department of Veterans Affairs, Washington, DC.

______________________ 

Before NEWMAN, CHEN, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge.

Western States Federal Contracting, LLC appeals the 

Civilian Board of Contract Appeals’ decision dismissing 

its appeal for lack of jurisdiction. Because the Board 

erred in finding that Western States lacked capacity to 

maintain the lawsuit, we reverse the Board’s decision and 

remand for further proceedings. 

I 

On September 30, 2009, the Department of Veterans 

Affairs contracted Western States to, among other things,

alter and expand the fire alarm and sprinkler system at 

the VA facility located in Phoenix, Arizona. The project 

took 699 days to complete—549 days longer than estimated. 

After the project was completed, Western States submitted a claim for $760,852.01 to the VA seeking compensation for damages related to the delay. Because the VA 

never issued a final decision on the claim it was deemed 

denied. 

Upon denial of the claim, Western States appealed to 

the Board. The Board requested, at least three times,

that Western States provide documentation establishing

that it was in good standing in Delaware, the state of its 

organization. Western States failed to provide this documentation, and on February 11, 2014, the Board dismissed the case after finding that Western States did not 

have the capacity to maintain the action because it was 

not in good standing due to its failure to pay its Delaware 

franchise taxes. Immediately thereafter, Western States

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WESTERN STATES FEDERAL v. DVA 3

paid its franchise taxes and was returned to good standing. 

Western States appealed to this court on June 10, 

2014. After Western States filed its opening brief, the VA 

filed an unopposed motion seeking to voluntarily remand 

the case so that the Board could address, among other 

things, whether Western States was an “unincorporated 

association” under Fed. R. Civ. P. 17(b)(3)(A). On March 

19, 2015, we entered an order vacating the Board’s decision and remanding the case for additional proceedings 

consistent with the order. 

On remand, Western States argued that because it 

was then in good standing, and the decision dismissing its 

claim had been completely vacated, the Board was required to consider the merits of its claim. The Board 

disagreed “because, at the time [the Board] dismissed this 

case for lack of jurisdiction, Western States was not in 

good standing, and Board Rule 26(a) (48 CFR 6101.26(a) 

(2014)) does not allow relief based on evidence that could 

have been presented at the underlying proceeding.” J.A. 

12. The Board dismissed the claim a second time after 

concluding that Western States was not an “unincorporated association” under Fed. R. Civ. P. 17(b)(3)(A). J.A. 

1–15. 

Western States again appeals, arguing that the Board 

erred in finding that it did not have capacity to prosecute 

the case on remand. We have jurisdiction under 28 

U.S.C. § 1295(a)(10). 

II

We review the Board’s conclusions of law without deference. Reliable Contracting Grp., LLC v. Dep’t of Veterans Affairs, 779 F.3d 1329, 1331 (Fed. Cir. 2015). We will 

uphold the Board’s factual findings unless those findings 

are “(A) fraudulent, arbitrary, or capricious; (B) so grossly 

erroneous as to necessarily imply bad faith; or (C) not 

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4 WESTERN STATES FEDERAL v. DVA

supported by substantial evidence.” 41 U.S.C. 

§ 7107(b)(2). 

During the first appeal, this court vacated the Board’s 

initial opinion in its entirety. J.A. 68. To “vacate” a 

decision “means to annul; to cancel or rescind; to declare, 

to make, or to render, void; to defeat, to deprive of force; 

to make of no authority or validity; to set aside.” Ala. 

Power Co. v. EPA, 40 F.3d 450, 456 (D.C. Cir. 1994). 

Although the Board initially dismissed the case because Western States was not in good standing under 

Delaware law, see Del. Code Ann. tit. 6, § 18-1107(l); J.A. 

55, the vacatur annulled this dismissal in its entirety, 

Ala. Power Co., 40 F.3d at 456. Consequently, on remand, 

the Board could not rely on the initial dismissal as 

grounds for finding that Western States lacked the capacity to maintain the action. Moreover, the Board could not

justify dismissing the case based on the fact that Western 

States was not in good standing at the time of the initial 

dismissal because Delaware law allows an LLC to maintain an action once it has been restored to good standing. 

Del. Code Ann. tit. 6, § 18-1107(l). 

Because we vacated the Board’s initial dismissal in its 

entirety and Western States had been restored to good 

standing at the time of the remand, the Board was required to consider the merits of Western States’ claim. 

Further, because Western States had the capacity to 

maintain the action under Delaware law, we need not 

decide whether the Board erred in its determination that 

Western States was not an “unincorporated association” 

under Fed. R. Civ. P. 17(b)(3)(A). 

We appreciate that Western States was not diligent in 

this matter and that the Board gave them sufficient 

opportunities to correct their lack of good standing before 

initially dismissing the appeal. Moreover, we recognize 

that the VA in good faith sought a limited remand to 

address an alternative legal theory not first considered by 

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WESTERN STATES FEDERAL v. DVA 5

the Board. We applaud the government’s willingness to 

seek such voluntary remands and do not intend to discourage that practice. However, this court’s prior order 

did not grant a limited remand, but, rather, vacated the 

Board’s prior decision in its entirety. As a subsequent 

panel, we are bound by the plain language of that order. 

Therefore, we reverse and remand to the Board for consideration of the merits of Western States’ claim. 

REVERSED AND REMANDED 

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