1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-8-1998

Gardiner v. VI Water Power Auth

Precedential or Non-Precedential:

Docket 96-7565

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Recommended Citation

"Gardiner v. VI Water Power Auth" (1998). 1998 Decisions. Paper 136.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/136
Filed June 8, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 96-7565 

FITZROY GARDINER, d/b/a 

WESTERN TRADING ENTERPRISES 

v. 

VIRGIN ISLANDS WATER & POWER AUTHORITY 

VIRGIN ISLANDS WATER & POWER AUTHORITY, 

 Third-Party Plaintiff 

v. 

THE FEDERAL EMERGENCY MANAGEMENT AGENCY; 

THE ARMY CORP OF ENGINEERS; 

THE UNITED STATES GEOLOGICAL SOCIETY 

 Third-Party Defendants 

 Virgin Islands Water & 

 Power Authority, 

 Appellant 

On Appeal from the District Court of the Virgin Islands 

Division of St. Croix 

(D.C. Civil Action No. 90-cv-00295) 

Argued April 8, 1997 

Before: BECKER, ROTH and WEIS, Circuit Judges 

(Opinion Filed June 8, 1998) 
 John K. Dema, Esq. (Argued) 

 Carey-Anne Moody, Esq. 

 Law Offices of John K. Dema 

 1236 Strand Street, Suite 103 

 Christiansted, St. Croix 

 U.S. Virgin Islands 00820-5008 

 Attorneys for Appellee 

 John J. Cooney, Esq. (Argued) 

 Venable, Baetjer, Howard & Civiletti 

 1201 New York Avenue, N.W. 

 Suite 1000 

 Washington, DC 20005 

 Barbara Twine-Thomas, Esq. 

 Virgin Islands Water & Power 

 Authority 

 P.O. Box 1450 

 Charlotte Amalie, St. Thomas 

 U.S. Virgin Islands 00804 

 Attorneys for Appellant 

OPINION OF THE COURT 

ROTH, Circuit Judge 

When Hurricane Hugo hit the Virgin Islands on 

September 17 and 18, 1989, it destroyed the potable water 

delivery system on St. Croix. The Virgin Islands Water and 

Power Authority (WAPA),1 and officials of the United States 

government immediately began efforts to restore water 

service, using fresh water wells. Because the equipment 

being used at each well site was in high demand on the 

island, FitzRoy Gardiner and his company, Western Trading 

Enterprises (Gardiner), were hired to perform security and 

maintenance service at the wells 24 hours a day. The bill 

for Gardiner's services over the following ten weeks came to 

$1,245,178, of which WAPA has paid $616,538. In this 

action Gardiner sought the balance from WAPA. WAPA 

_________________________________________________________________ 

1. WAPA has the statutory obligation to provide water for the residents 

of the Virgin Islands, V.I. Code Ann. tit. 30 S 105(a). 

 2 
based its refusal to pay on its contention that it did not 

contract with Gardiner but that Gardiner contracted

instead with the United States. 

I. Factual Background 

In the days following the hurricane, the United States 

and WAPA worked together to implement a water 

distribution system using about 45 fresh water wells 

located in well fields owned by WAPA. Each well required a 

pump and a generator to power it. From the wells, water 

was pumped into storage tanks and then into pressurized 

distribution lines. These too required pumps and 

generators. The Army Corps of Engineers, along with the 

Federal Emergency Management Agency (FEMA) and WAPA, 

obtained the necessary equipment, which was apparently 

owned, at least in part, by the federal government.

By early October the new system was in place, but 

security at the wells quickly became a serious problem 

despite a tightly-enforced curfew to prevent violence and 

looting. The lack of electric power on the Island made the 

generators very desirable; the wells themselves were located 

in remote areas, covered with dense vegetation up to six 

and a half feet high. WAPA employees provided security 

services during the first few days of October, until several 

employees were threatened by persons who were attempting 

to steal the generators and pumps. The United States 

Army, the National Guard, and the Virgin Islands Police 

Department refused to provide the necessary 24 hour

security. WAPA acknowledges that providing the security 

was hazardous work. 

Bruce Green, an employee of the United States Geological 

Survey assigned by FEMA to work on the Islands, and

Romeo Cipriani, Superintendent of the Water Distribution 

System for WAPA on St. Croix, met with Gardiner in early 

October to discuss security at the well fields. Gardiner had 

previously worked for WAPA and was already doing work 

for WAPA on another project. Green and Cipriani reviewed 

the problems at the wells with Gardiner, and Gardiner 

orally agreed to provide both security and maintenance 

services 24 hours a day. According to Bruce Green's

 3 
deposition, Gardiner was told at this initial meeting that 

WAPA would be reimbursed by the federal government for 

the payments to Gardiner. Gardiner, on the other hand, 

testified that he did not learn this until later. There was no 

written contract. Gardiner began to perform the services 

immediately. He had people in the field within hours. By all 

accounts, Gardiner and his crews were resourceful and 

highly successful. In order to assure uninterrupted service, 

Gardiner constructed shelters for his crews at the wells. His 

crews kept the equipment fueled and performed 

maintenance services such as changing oil, adjusting 

carburetors, and repairing and replacing filters, mufflers, 

starter cords, and other parts. When three generators 

failed, Gardiner replaced them with his own. 

On October 25, 1989, Gardiner, Cipriani, and Fred 

Rounsaville of the Army Corps of Engineers met to discuss 

Gardiner's fee for his services. Gardiner agreed to lower his 

rates from $30 to $22.50 per person per hour during the 

day and from $35 to $27.50 per hour at night.2 In a

memorandum discussing this negotiation, Rounsaville

wrote that the "charges of $30 and $35 per hour" were 

"excessive and I requested a meeting with Mr. Cipriani of 

WAPA, the contractor and Mr. Green." Rounsaville also 

wrote that he thought the new rates were still too high but 

that "I agreed to the hourly rates" because of the 

"importance of providing drinking water to the residence 

[sic]." Gardiner, according to the memo, threatened to 

withdraw all workers by nightfall if his terms were not met. 

Finally, Rounsaville's memo states that "I discussed this 

with John Swanson and he agreed with my conclusion even 

though the rates were higher than usual the need 

outweighed the costs." 

The United States was still unhappy with Gardiner's fees, 

however, and on November 2, 1989, Rounsaville and 

_________________________________________________________________ 

2. These figures are taken from the district court's opinion at page 6. 

The 

court's findings of fact and conclusions of law, which followed the bench 

trial on damages, reflect that the billing was actually somewhat more 

complicated. Findings of Fact and Conclusions of Law at PP 17-22. The 

billing rates and amount of damages are not at issue on this appeal 

except that WAPA has challenged the award (but not the amount) of 

prejudgment interest. 

 4 
Gardiner agreed to lower the rates to $20 per hour during 

the day and $25 per hour at night, beginning with the sixth 

week of service. WAPA maintains that none of its employees 

participated in this meeting. 

As discussed by Green, Cipriani, and Gardiner at their 

initial meeting, Gardiner submitted his invoices to WAPA. 

On November 2, 1989, WAPA paid the invoices, which 

totaled $282,275 for the weeks ending October 7 and 14. 

Gardiner received payment for the last two weeks of

October, more than $334,000, on approximately November 

7. The checks to Gardiner were signed by Nellon Bowry, 

chief financial officer of WAPA, and Alberto Bruno-Vega, 

Executive Director of WAPA. 

On November 21, 1989 the WAPA Governing Board 

passed a resolution that, according to Bruno-Vega's

deposition testimony, ratified his expenditures in excess of 

$75,000 in the immediate wake of the hurricane. The

resolution provided in part: 

 WHEREAS, in an informal emergency meeting of the 

 Governing Board, and in other meetings of the 

 Governing Board's Finance Committee, since Hurricane 

 Hugo, the Governing Board informally granted the 

 Executive Director the authority to temporarily 

 negotiate, sign and execute contracts and other 

 transactions of the Authority for amounts in excess of 

 $75,000, without prior consent of the Governing Board; 

 therefore, 

 BE IT RESOLVED BY THE GOVERNING BOARD: that 

 the Executive Director of the Authority, Alberto Bruno- 

 Vega, be authorized to negotiate, sign and execute 

 contracts and other necessary transactions of the 

 Authority for amounts in excess of $75,000, without 

 prior consent and knowledge of the Governing Board, 

 during the Authority's emergency efforts to restore 

 service and to repair its facilities from the damage 

 caused by Hurricane Hugo. Said authorization shall 

 terminate upon the entry of a resolution of the 

 Governing Board expressly terminating said temporary 

 authorization. 

After paying Gardiner for the last two weeks of October, 

WAPA refused to make any further payments. WAPA paid 

 5 
Gardiner $616,538 in total, covering the first four weeks of 

services. Gardiner billed WAPA a total of $1,245,178 for the 

ten weeks of services. Gardiner testified that he was shown 

a check in the middle of November that had been made out 

to him by a WAPA employee, but that he was told there was 

a problem and it would not be delivered immediately. WAPA 

did not, however, tell Gardiner to stop protecting the wells 

or to seek payment from the federal government. Gardiner 

continued to provide services through the middle of

December. Beginning in November, WAPA charged its 

customers for the water supplied by the well fields. 

Under the system set up for Gardiner's payments, WAPA 

paid Gardiner and then sought reimbursement from the 

United States. WAPA claims that it stopped paying Gardiner 

when it realized that FEMA might not reimburse it for 

Gardiner's services. WAPA has stipulated that each time it 

requested reimbursement for expenses, it had tofile a "form 

No. 270," which stated, in part that "FEMA is not a party 

to this contract." Damage Survey Reports ("DSR"), which 

accompany requests for assistance after a natural disaster, 

were compiled by Fred Rounsaville and submitted to FEMA. 

Although Rounsaville approved Gardiner's rates and told 

WAPA officials that senior FEMA officials approved them as 

well, FEMA initially authorized payment of $830,000 to 

WAPA, more than $400,000 less than Gardiner was owed. 

This figure was further reduced by the Inspector General's 

review of the billing after Gardiner had finished the work. 

After this audit, FEMA agreed to reimburse WAPA a total of 

only $443,000. 

II. Procedural Background 

Gardiner filed suit against WAPA in November, 1990, in 

the District Court of the Virgin Islands. The complaint 

alleges that WAPA breached a contract with Gardiner when 

it refused to pay for Gardiner's services. 

On January 25, 1991, WAPA filed a third party complaint 

against FEMA, the Army Corps of Engineers and the United 

States Geological Society. The third party defendants, along 

with Gardiner, moved to dismiss. The court granted the 

motion on April 17, 1991, in a two page order, which read 

in part: 

 6 
 The third party plaintiff having conceded that the 

 jurisdiction of the third party claim belongs with the 

 United States Claims Court; and 

 It appearing that the United States Claims Court does 

 not have jurisdiction over the plaintiff's claim against 

 the Virgin Islands Water and Power Authority as that 

 court does not have jurisdiction over suits between 

 private parties [citation omitted]...IT IS...ORDERED 

 that the motion of the third party defendants is 

 granted.... 

On July 12, 1991, WAPA moved to "Amend and/or 

Reinstate a Third-Party Complaint and a Cross Claim

Against the United States of America and to Transfer Entire 

Matter to the United States Claims Court." WAPA argued in 

support of the second motion that under 28 U.S.C. S 1631, 

the district court could transfer the case to the Court of 

Claims after joining the United States as a party. 

The district court granted WAPA's motion to amend 

and/or reinstate its third party complaint on June 30, 

1992. The district court reasoned that the transfer was 

appropriate pursuant to 28 U.S.C. S 1406(c). Gardiner 

appealed. The Court of Appeals for the Federal Circuit 

reversed and remanded on September 2, 1993. The Court 

of Appeals determined, in part, that "the district court 

relied on 28 U.S.C. S 1406(c) as it existed prior to 1982 in 

transferring this case to the claims court," that this statute 

"was repealed by Congress in 1982," and no longer 

provided the court with authority to transfer the case. The 

Court of Appeals also noted that WAPA did not allege in its 

pleadings that it had a contract with the United States and 

that WAPA therefore did not state "a claim upon which 

relief may be granted by the claims court." 

On September 10, 1993, WAPA renewed its earlier 

motion, dated May 10, 1991, to dismiss for failure to join 

an indispensable party, the United States. The district 

court heard argument on the motion on December 20, 

1993, and denied it "for the reasons stated on the record." 

The court stated that "[t]his is a case we've struggled with 

and struggled with, and based on law and a growing equity 

of claims of injustice [sic] compelled and must be denied." 

The court also said that it would let WAPA use "the

 7 
evidence of FEMA assurances" and the evidence of an

agreement between the plaintiff and the United States "to 

disprove the plaintiff 's claim of a contract between it and 

WAPA." WAPA filed a notice of appeal on January 19, 1994. 

The appeal was dismissed for lack of jurisdiction on 

November 18, 1994. 

The district court granted a motion by Gardiner for

partial summary judgment on August 17, 1995. The court 

held that Gardiner and WAPA had a binding contract, but 

reserved the issue of damages for trial. After a bench trial 

on January 23 and 24, 1996, the court issued findings of 

fact and conclusions of law on August 14, 1996. The court 

found that WAPA owed Gardiner $628,640 for unpaid 

services performed by Gardiner under the contract and that 

WAPA was liable for prejudgment interest in the amount of 

$377,184. The interest represented 9% simple interest per 

annum from December 9, 1989, to August 8, 1996. The

court entered judgment for Gardiner in the amount of 

$1,005,824. The court also awarded Gardiner attorney's 

fees and set a briefing schedule to determine the amount. 

WAPA appealed to this Court on September 12, 1996. 

The district court had jurisdiction of this case under 48 

U.S.C. S 1612. We have appellate jurisdiction under 28 

U.S.C. S 1291. 

III. Motion to Dismiss for Lack of an 

Indispensable Party 

WAPA argues that under Federal Rule of Civil Procedure 

19(b) the district court should have dismissed this case 

because the United States is an indispensable party which 

cannot be joined. WAPA maintains that because the United 

States was not a party, WAPA was not able to demonstrate 

that Gardiner contracted with the United States instead of 

with WAPA. WAPA bases this claim in part on the fact that 

it had only limited discovery against the United States. 

WAPA also contends that this action will impact the United 

States because the decision will resolve some of the terms 

of the contract, such as the amount that Gardiner is 

entitled to recover. Finally, WAPA claims that failure to 

include the United States as a party forces WAPA to

assume the risk of inconsistent obligations. 

 8 
In determining whether a district court should have

dismissed a case under Rule 19(b) for failure to join an 

indispensable party, we must make a preliminary 

determination that the non-joined party cannot be joined 

under Rule 19(a). Only if a party cannot be joined under 

Rule 19(a), does Rule 19(b) come into play.3 Shetter v. 

_________________________________________________________________ 

3. Federal Rule of Civil Procedure 19 provides in part that: 

 (a) Persons to be Joined if Feasible. A person who is subject to 

 service of process and whose joinder will not deprive the court of 

 jurisdiction over the subject matter of the action shall be joined 

as 

 a party in the action if 

 (1) in the person's absence complete relief cannot be accorded 

 among those already parties, or 

 (2) the person claims an interest relating to the subject of the 

 action and is so situated that the disposition of the action in the 

 person's absence may 

 (I) as a practical matter impair or imped the person's ability to 

 protect that interest or 

 (ii) leave any of the persons already parties subject to a 

 substantial risk of incurring double, multiple, or otherwise 

 inconsistent obligations by reason of the claimed interest. 

 If the person has not been so joined, the court shall order that 

the 

 person be made a party. If the person should join as a plaintiff 

but 

 refuses to do so, the person may be made a defendant, or, in a 

 proper case, an involuntary plaintiff. If the joined party objects 

to 

 venue and joinder of that party would render the venue of the 

action 

 improper, that party shall be dismissed from the action. 

 (b) Determination by the Court Whenever Joinder Not Feasible. 

 If a person as described in subdivision (a)(1)-(2) hereof cannot be 

 made a party, the court shall determine whether in equity and good 

 conscience the action should proceed among the parties before it, 

or 

 should be dismissed, the absent person being thus regarded as 

 indispensable. The factors to be considered by the court include: 

 first, to what extent a judgment rendered in the person's absence 

 might be prejudicial to the person or those already parties; 

second, 
 the extent to which, by protective provisions in the judgment, by 

the 

 shaping of relief, or other measures, the prejudice can be lessened 

 or avoided; third, whether a judgment rendered in the person's 

 absence will be adequate; fourth, whether the plaintiff will have 

an 

 adequate remedy if the action is dismissed for nonjoinder. 

(emphasis added). 

 9 
Amerada Hess Corporation, 14 F.3d 934, 941 (3d Cir.

1993); Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 

11 F.3d 399, 404 (3d Cir. 1993). 

We exercise plenary reviews over a Rule 19(a) 

determination to the extent that it is based on conclusions 

of law; as to subsidiary findings of fact we apply a clear 

error standard. HB General Corp. v. Manchester Partners, 

L.P., 95 F.3d 1185, 1189 (3d Cir. 1996) (citing Janney, 11 

F.3d at 404). Rule 19(b) determinations are reviewed for an 

abuse of discretion. HB General Corp., 95 F.3d at 1189. 

Even assuming that the United States could not have

been joined under Rule 19(a), we cannot conclude that the 

district court abused its discretion in refusing to dismiss 

under Rule 19(b). See Schulman v. J.P. Morgan Inv. 

Management, Inc., 35 F.3d 799, 806 (3d Cir. 1994). Under 

Rule 19(b), the district court had to decide whether the 

United States's participation in the litigation was so 

important that "in equity and good conscience the 

action...should be dismissed, the absent person being thus 

regarded as indispensable." The four factors listed in the 

Rule are not exhaustive, but they are the most important 

considerations in deciding whether to dismiss the action. 

Wright, Miller & Kane, Federal Practice and Procedure 

S 1608 at 91 (2d Ed. 1986). 

The first and second factors under Rule 19(b) are "to 

what extent a judgment rendered in the person's absence 

might be prejudicial to the person or those already parties," 

and to what extent such prejudice can be avoided. Here, 

there is little danger of prejudice to the absent party -- the 

United States -- if this case goes forward without it. Indeed, 

the United States does not want to become a party to the 

suit, strongly suggesting that its interests will not be 

impeded if the suit goes forward without it. See Sindia 

Expedition v. Wrecked & Abandoned Vessel, 895 F.2d 116, 

121 (3d Cir. 1990) (reasoning that Rule 19(a)(2)(I) did not 

apply because New Jersey was "manifestly unconcerned 

with any adjudication in its absence");4 see also Peregrine 

_________________________________________________________________ 

4. The first factor under Rule 19(b) overlaps considerably with the Rule 

19(a) analysis. Wright, Miller & Kane, Federal Practice and Procedure 

S 1608 at 91. 

 10 
Myanmar Ltd. v. Segal, 89 F.3d 41, 49 (2d Cir. 1996). 

Moreover, there is no prejudice to Gardiner in excluding the 

United States. Gardiner can recover fully from WAPA, the 

party with whom Gardiner claims it has a contract. 

WAPA, on the other hand, argues that the absence of the 

United States has seriously hampered WAPA's effort to 

show that there was no contract between WAPA and 

Gardiner. WAPA has not, however, come forward with much 

to support this claim. Indeed, as Gardiner points out, 

WAPA deposed a number of federal officials: Fred 

Rounsaville, Edward Orchowski, Steve Singer, Thomas

Barbee, Adair Martin, David Shriver, Wynn Fuller, Colonel 

Cox, and Gerald Connolly. Despite the depositions, WAPA 

claims that it was unable to obtain relevant "internal 

documents" from the government, but WAPA has not 

presented specific evidence of prejudice. Although we do 

not suggest that WAPA must identify beforehand the 

contents of the documents that it seeks, WAPA must 

nonetheless identify with greater specificity the information 

that it needs. For example, WAPA might, argue that it could 

not show which federal officials had the implied authority 

to contract with Gardiner because it was not given 

information about their jobs and responsibilities. Or WAPA 

might assert that it could not learn who the contracting 

officers on St. Croix were immediately after Hugo hit. WAPA 

has not, however, made any such contention. Given the 

extensive discovery permitted in this case, WAPA should be 

able to identify any missing information with more detail 

than the phrase "internal documents." 

WAPA also argues that it "runs the risk of inconsistent 

adjudication of its rights" if the United States is not joined 

because, if Gardiner prevails, WAPA must then pursue a 

remedy against the United States in a different action. The 

risk of inconsistent judgments, although mentioned 

specifically in Rule 19(a)(2)(ii), is relevant under Rule 19(b) 

as well. Schulman, 35 F.3d at 806. In general, however, "a 

defendant's right to contribution or indemnity from an 

absent non-diverse party does not render that absentee 

indispensable pursuant to Rule 19." Janney, 11 F.3d at 

412. In Janney, we considered an agreement in which

Janney would serve as an advisor to Underwood and its 

 11 
subsidiary, Shepard Niles. Janney sued Shepard Niles, and 

Shepard Niles contended that Underwood, as a co-obligor to 

the contract, was a party to be joined if feasible under Rule 

19(a). If joined, Underwood would have destroyed diversity 

jurisdiction. 

We concluded that the outcome of the case would be"res 

judicata or collateral estoppel as between Janney and 

Shepard Niles," but that Janney "remain[ed] free to claim 

contribution or indemnity from Underwood." We went on 

the explain that "a defendant's right to contribution or 

indemnity from an absent non-diverse party does not

render that absentee indispensable pursuant to Rule 19." 

11 F.3d at 412 (quoting Bank of America National Trust and 

Savings Association, 844 F.2d 150, 1054 (3d Cir. 1988)). A 

defendant may implead the absent party under Federal 

Rule of Civil Procedure 14, but is not required to do so, 

"and if it does not, its right to bring a separate action for 

contribution or indemnity is unaffected." Id.5 

In this case, unlike Janney, the defendant does not have 

the option to implead the absent party because we lack 

jurisdiction over the United States. Indeed, the third-party 

complaint which WAPA filed against FEMA, the Army Corps 

of Engineers, and the United States Geological Society, was 

dismissed for lack of jurisdiction. But the reasoning of 

Janney -- if a defendant does not implead an absent party, 

there is no legal effect on its rights of contribution or 

indemnification -- applies with equal force here.6 WAPA is 

free to pursue any claim it has against the United States in 

_________________________________________________________________ 

5. Some courts, and Wright, Miller & Kane, reason that joint obligors to 

a contract "are treated as Rule 19(a) parties, but are not deemed 

indispensable under Rule 19(b). Wright, Miller & Kane, Federal Practice 

& Procedure S 1613 at 182-183." 

6. WAPA suggests that the terms of a contract between it and the United 

States could be determined in the litigation between WAPA and Gardiner. 

Specifically, WAPA points to the issue of what rates Gardiner was 

entitled to receive. It is not clear, however, how the determination of 

the 

rates in a contract between Gardiner and WAPA necessarily resolves the 

issue of the reimbursement which the United States may have agreed to 

pay WAPA. WAPA, for example, may have agreed to pay Gardiner's high 

rates, while the United States may have contracted with WAPA to 

reimburse standard or reasonable rates. We express no opinion on these 

issues and raise them only to note the problems in WAPA's claim. 

Contrary to WAPA's claim, this litigation will only bind the parties 

involved and those in privity with them; this does not appear to include 

the United States. 18 Moore's Federal Practice, S 132.01[1] (Matthew 

Bender 3d ed.) 
 12 
a separate action. We recognize that this is a less

convenient remedy for WAPA. Nevertheless, it is a means of 

resolving WAPA's claim of the risk of inconsistent 

obligations. 

WAPA's final argument on the issue of prejudice is that 

the district court did not permit it to present its defense 

that Gardiner contracted not with WAPA, but with the 

United States. In support, WAPA points to the district 

court's statements that the involvement of the United 

States was not "material" or "pertinent." These statements 

reflect, however, the district court's conclusion that 

Gardiner had demonstrated that Gardiner and WAPA had a 

contract, making summary judgment appropriate. If the 

district court determined that a contract existed between 

WAPA and Gardiner, Gardiner was entitled to summary

judgment, regardless of what agreement WAPA may have 

had with the United States. We will consider the district 

court's grant of summary judgment in the next section. We 

note only that whatever "prejudice" may have enured from 

the district court's conclusions on materiality and

pertinence goes only to the issue of the propriety of 

summary judgment. The district court's statement that 

certain activities by federal officials were not"material" to 

its determination that Gardiner's contract was with WAPA 

was made in the context of the consideration of summary 

judgment and it has no bearing on whether joinder of the 

United States was feasible under Rule 19(b). 

The third factor under Rule 19(b) is "whether a judgment 

rendered in the person's absence will be adequate." This 

element allows the court to consider whether the relief it 

may grant will be an adequate remedy for the plaintiff. 

Provident Bank & Trust Co. v. Patterson, 390 U.S. 102, 112 

(1968). Wright, Miller & Kane, Federal Practice & Procedure 

S 1608 at 116. This factor weighs, in our view, in favor of 

WAPA. WAPA's claim, as construed by the district court, 

will be resolved in one action. Moreover, as we note above, 

the possibility that the defendant may have a claim for 

contribution or indemnity does not render an absentee 

indispensable. The right to contribution and indemnity 

should not, therefore, be considered to cause inadequacy of 

the resulting judgment. 

 13 
The fourth Rule 19(b) factor, whether the plaintiff has a 

remedy if the action is dismissed, counsels strongly against 

dismissal in this case. WAPA argues that "Gardiner could 

have filed the same action in the Court of Federal Claims, 

where all parties could be joined in one action, for a 

conclusive and mutually consistent resolution of their 

rights and responsibilities." The problem with this

argument, however, is that Gardiner does not allege that he 

had a contract of any sort with the United States. Gardiner 

has not alleged a cause of action against the United States; 

thus, he does not have a remedy in the Court of Claims. 

Unless Gardiner claims a contractual relationship with the 

United States, the Court of Claims simply has no 

jurisdiction over the case. The Court of Appeals for the 

Federal Circuit reversed Judge Brotman's transfer of the 

case to the Court of Claims for exactly this reason-- that 

court had no jurisdiction over a dispute between WAPA and 

Gardiner. Decision of the Court of Appeals for the Federal 

Circuit, September 2, 1993; Appendix at 2167, 2171-2172. 

WAPA's argument that Gardiner should file in the Court of 

Claims implies that Gardiner has to rewrite his claim to 

assert that his contract was with the United States. Such 

a revision would, however, provide no remedy for the claim 

that Gardiner makes against WAPA for breach of contract. 

With these considerations in mind, we conclude that the 

district court did not abuse its discretion in denying the 

Rule 19(b) motion. Gardiner would have had to have alleged 

an entirely new cause of action against the United States in 

order to bring this suit in the Court of Claims. Indeed, 

Gardiner would have had to have alleged something that it 

maintains did not exist -- a contract with the United 

States. Moreover, WAPA's claim of prejudice in discovery 

matters, as we have seen, adds little. For these reasons, it 

was well within the discretion of the district court to deny 

WAPA's motion. 

IV. Summary Judgment 

In granting summary judgment for Gardiner, the district 

court reasoned that neither Cipriani for WAPA nor Green 

for FEMA had the authority to enter into a contract on 

behalf of the parties that they represented. The district 

 14 
court concluded, however, that the actions of Cipriani were 

later ratified by Bruno-Vega and the WAPA Board, resulting 

in an enforceable contract. On the other hand, the court 

reasoned that there "is simply no evidence of ratification of 

the agreement by any other individual who could have 

ratified a contract entered into by Mr. Green." The court 

accordingly granted summary judgment on the issue of 

liability in favor of Gardiner and against WAPA. We exercise 

plenary review. Public Interest Research of N.J. v. Powell 

Duffryn Terminals Inc., 913 F.2d 64, 71 (3d Cir. 1991). 

WAPA make three basic arguments that summary 

judgment for Gardiner was error. First, it points to evidence 

that FEMA officials ratified Green's actions and made 

binding the alleged contract between Green and Gardiner. 

Second, WAPA argues that in this emergency situation 

where the United States played a large role in negotiating 

and overseeing the contract, WAPA can recover if it proves 

an implied-in-fact contract, even if no "contracting officer" 

with specific authority to bind the United States approved 

the contract. Finally, WAPA maintains that, even if it had a 

contract with Gardiner, there is evidence that the contract 

included a term that Gardiner would only be paid to the 

extent that WAPA was reimbursed by the government, 

precluding summary judgment for Gardiner. 

The government enters into contracts with the public 

through "contracting officers." LDG Timber Enterprises, Inc. 

v. Glickman, 114 F.3d 1140, 1143 (Fed. Cir. 1997). The 

Federal Acquisition Regulation ("FAR") defines a contracting 

officer as "a person with the authority to enter into, 

administer and/or terminate contracts and make related 

determinations and findings." 48 CFR S 2.101 (1996). The 

regulations also provide that "[c]ontracts may be entered 

into and signed on behalf of the Government only by

contracting officers," 48 CFR S 1.601(a), and that 

"[c]ontracting officers may bind the Government only to the 

extent of the authority delegated to them." 48 CFR S 1.602- 

1(a). Part 4401 of FAR "sets forth policies and procedures 

concerning the Federal Emergency Management Agency 

Acquisition Regulation (FEMAAR) System." 48 CFR 

S 4401.000. This part states the qualifications required for 

contracting officers within FEMA and explains that except 

 15 
for "disaster-related activities and unusual circumstances 

as determined by the head of the contracting activity, it is 

policy to delegate contracting officer authority to individuals 

rather than positions." 48 CFR SS 4401.603-2(a) and

4401.603-3. 

As the discussion above makes clear, only those with 

specific authority can bind the government contractually; 

even those persons may do so only to the extent that their 

authority permits. Moreover, a party who seeks to contract 

with the government bears the burden of making sure that 

the person who purportedly represents the government 

actually has that authority: 

 Whatever the form in which the Government functions, 

 anyone entering into an arrangement with the

 Government takes the risk of having accurately 

 ascertained that he who purports to act for the 

 Government stays within the bounds of his authority. 

 The scope of this authority may be explicitly defined by 

 Congress or be limited by delegated legislation, 

 properly exercised through the rule-making power. And 

 this is so even though, as here, the agent himself may 

 have been unaware of the limitations upon his power. 

Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947). 

This allocation of risk, the Court reasoned, "does not 

reflect a callous outlook," but instead "merely expresses the 

duty of all courts to observe the conditions defined by 

Congress for charging the public treasury," whether those 

conditions appear in the statutes themselves or are part of 

regulations that implement those statutes. Id. at 384-385. 

Other policy grounds supporting this rule were stated more 

recently by the Federal Circuit: "The United States

Government employs over 3 million civilian employees. 

Clearly, federal expenditures would be wholly 

uncontrollable if Government employees could, of their own 

volition, enter into contracts obliging the United States." 

City of El Centro v. U.S., 922 F.2d 816, 820 (Fed. Cir. 1990). 

In this case, Gardiner claims that WAPA's defense that 

Gardiner actually had a contract with the United States, 

not WAPA, is defeated by WAPA's failure to identify a 

contracting officer who could have bound the United States. 

 16 
We agree. It is undisputed that Bruce Green had no such 

authority; neither did Gerald Connolly, the federal

coordinating officer for the Virgin Islands disaster, or 

Steven Singer, the deputy federal coordinating officer for St. 

Croix. WAPA argues that it has presented evidence of 

ratification of the contract by "senior officials in the FEMA 

disaster relief effort," namely Connolly and John Swanson. 

WAPA has pointed to absolutely no evidence that Swanson 

had the authority to contract on behalf of the government. 

The record is clear that Connolly did not. Although WAPA 

contends it has been unable to get information that it needs 

from the United States during the course of this litigation, 

it deposed at least five FEMA officials and has pointed to no 

unanswered question as to who the contracting officers 

were in FEMA or on St. Croix. Because there is no evidence 

to support WAPA's claim that the contract was ratified by 

someone in the federal government who had the authority 

to do so, summary judgment was appropriate unless, as 

WAPA also argues, the approval of a contracting officer was 

not necessary. 

WAPA maintains that no contracting officer needed to 

approve the agreement for the United States because this 

case comes within a "branch of the implied-in-fact contract 

doctrine that applies specifically in emergency situations." 

To prove an implied-in-fact contract, the party alleging that 

contract must show the same elements required in an

express contract: offer, acceptance, and consideration. See 

Trauma Services Group v. United States, 104 F.3d 1321, 

1325 (Fed. Cir. 1997). Proof of an implied-in-fact contract 

comes not from an express agreement, however, but from 

"conduct of the parties showing, in the light of the 

surrounding circumstances, their tacit understanding." Id. 

(quoting Hercules, Inc. v. United States, 116 S.Ct. 981, 985 

(1996) (quoting Baltimore & Ohio R.R. Co. v. United States, 

261 U.S. 592, 597 (1923))). Significantly, an implied-in-fact 

contract, like an express contract, must include 

authorization (whether implied or express) by an agent with 

the authority to bind the United States. Trauma Services, 

104 F.3d at 1326; City of El Centro, 922 F.2d at 820. 

WAPA argues that the required authorization can be 

implied from the high-ranking officials who tacitly approved 

 17 
the contract and that because this was an emergency

situation a contracting officer was not required to bind the 

United States. There is, as WAPA maintains, evidence that 

federal officials played a major part in negotiating and 

overseeing Gardiner's contract to provide security and 

maintenance services. This evidence also indicates that the 

federal government may have benefitted from the security 

services because of its ownership of the generators. Federal 

officials also negotiated fee reductions on at least two 

occasions; in one instance WAPA claims that none of its 

officials were even present. WAPA sought and obtained 

assurance from Rounsaville that the rates were acceptable 

to FEMA officials. Apparently, Rounsaville also cleared the 

rates with John Swanson and Gerald Connolly, FEMA's

coordinating officer in the Virgin Islands. The Hurricane 

Hugo emergency required, at least initially, quick action by 

WAPA and federal officials. 

We cannot agree with WAPA, however, that this evidence 

creates a genuine issue of material fact as to whether the 

actions of the senior FEMA officials bound the United 

States in a contract with Gardiner. The possibility that the 

contract was implied-in-fact does not dispense with the 

requirement that those whose course of conduct show

contractual intent have the actual authority to bind the 

government. Trauma Services, 104 F.3d at 1326. "Senior" 

officials may or may not have contracting authority; WAPA 

has come forward with nothing suggesting that those

involved with the procurement of Gardiner's services did. 

See City of El Centro, 922 F.2d at 821 (placing burden of 

showing that government agent had requisite contracting 

authority with the party seeking to show an implied-in-fact 

contract with the government).7 

_________________________________________________________________ 

7. In some situations authority to bind the government can be implied 

"when such authority is considered to be an integral part of the duties 

assigned to a [g]overnment employee." H. Landau & Co. v. United States, 

886 F.2d 322, 324 (Fed. Cir. 1989) (quoting J. Cibinic & R. Nash, 

Formation of Government Contracts 43 (1982)). WAPA has not advanced 

this argument however, and has accordingly not pointed to evidence 

specifically suggesting that the authority to bind the government was 

"necessary or essential" to the duties of the federal officials involved. 

Roy 

v. United States, 38 Fed. Cl. 184, 188 (1997). It seems that to the extent 

 18 
Neither does the urgency of the situation suggest a

different outcome. WAPA relies on Halvorson v. United 

States, 126 F. Supp. 898 (E.D. Wash. 1954), in which the 

court concluded that under the emergency conditions

created by a blizzard, the United States was responsible for 

the costs incurred when federal officials directed 

contractors to remove snow from the interior of a buildings 

that was under construction. The contractors had made 

clear that the building should not include uncovered 

ventilation slots, but the Corps of Engineers insisted that it 

should. As the contractors predicted, snow blew into the 

interior of the unfinished buildings, threatening to do 

substantial damage if it melted. The local job inspector, and 

his immediate supervisor, directed the contractors to 

remove the snow, which significantly reduced damages. The 

Corps of Engineers refused to pay for the removal. The 

court reasoned that: 

 Whether or not the Resident Inspector, Mr. Jackson, 

 and his supervisor, the Resident Engineer, had 

 authority to bind the government by express contract, 

 or to modify the written contract by oral agreement, 

 they did, in the emergency situation created by the 

_________________________________________________________________ 

such authority was an integral part of the duties assigned to the first 

officials that arrived on the Island, it would not extend to a contract 

for 

services lasting ten weeks. Moreover, application of this doctrine is 

based 

on "the existence of some express actual authority." Id. at 189, n.18. 

Thus in Landau, the Federal Circuit concluded that two federal officials 

who had the authority to co-sign for withdrawals from a joint bank 

account that provided advance financing to government contractor, may 

have had the implied authority to bind the government. A supplier to the 

contractor sought letters from the federal officials -- who were not 

contracting officers -- guaranteeing payment from the joint bank 

account. The officials provided two such letters, the contractor did not 

pay, and the government argued that its guarantee was invalid because 

the officials lacked authority to bind it. The court concluded that the 

explicit authority to draw checks on the account, considered with the 

responsibility of finding suppliers, "may have carried with it the 

implicit 

authority to assure suppliers that they would be paid for providing the 

materials." 886 F.2d at 324. Here, WAPA has pointed to no official who 

had express actual authority, of any sort, from which further authority 

could be implied. 

 19 
 damage done by the blizzard, have authority to direct 

 the contractors to proceed at once to minimize the 

 damage by immediate remedial action. 

126 F. Supp. at 900. 

Whatever the continuing vitality of this doctrine, it is 

inapposite here. First, in Halvorson the government and the 

plaintiffs had already entered into a contract with each 

other, duly authorized by a contracting officer of the United 

States. Payment for the snow removal would fall either to 

the government -- the party who was benefited by the 

removal and whose negligence created the problem in the 

first place -- or to the contractor had who recommended 

constructing the building so as to avoid the problem. 

In this case, the existence of a contractual relationship 

between Gardiner and the United States is itself at issue. 

Standard Form 270, provided by the government of the 

Virgin Islands for use in requesting reimbursements from 

the United States, explains that 

 FEMA is not a party to this contract. Disputes arising 

 between the parties to the contract will be resolved 

 between the contractual parties by such means are 

 available under the contract. Payment to the

 CONTRACTOR will not be contingent upon FEMA 

 reimbursement 

Thus, it appears that FEMA believed that there was no 

contract between it and Gardiner and that WAPA and 

Gardiner should sort out between themselves any disputes 

over payment. Moreover, even if the government benefited 

from Gardiner's services because it owned the generators, 

WAPA's benefit was at least as substantial because 

Gardiner enabled WAPA to restore drinking water, and 

ultimately to charge its customers for that water. 

Moreover, despite the devastation created by Hurricane 

Hugo and the urgent need to supply a fresh water to the 

island, the policy implicit in Halvorson does not apply here. 

In Halvorson, the contractor's efforts were directed at 

removing snow as quickly as possible before a thaw melted 

the snow and destroyed the interior of the building. To this 

end it used "all of [its] men on the job and all of the men 

 20 
they could employ in Havre," and even so some of the snow 

melted before it was removed. 126 F. Supp. 900. In this 

case, on the other hand, Gardiner provided emergency 

services for ten weeks, the provision of those services 

ultimately involved the highest level officials in WAPA, and 

the emergency brought federal officials with contracting 

powers to the Virgin Islands, although WAPA has presented 

no evidence that these officials were involved in this 

contract. If this case concerned only emergency services 

provided in the first hours or days after the hurricane, we 

would consider this claim in a different light, particularly in 

view of WAPA's evidence of significant involvement of 

federal officials in all aspects of procuring Gardiner's 

services. But the federal government reimbursed WAPA in 

the amount of $443,000, which paid for more than thefirst 

two weeks of services by Gardiner. WAPA had ten weeks 

during which it could have made sure that a contracting 

officer approved any contract between Gardiner and the 

United States or it could have asked Gardiner to 

discontinue his services. WAPA did neither. 

Finally, WAPA argues that summary judgment was 

inappropriate because "the Gardiner contract, whomever it 

was with, contained a term that payment would be made 

only in amounts FEMA found were reimbursable." Gardiner 

asserts that this issue was not raised in the district court 

and should not be considered on appeal. WAPA responded, 

in its reply brief, that the "evidentiary submission on this 

point in district court refutes Gardiner's contention that 

this issue is being raised for the first time on appeal." At 

oral argument, WAPA maintained that this issue had been 

raised to the district court through WAPA's disputed 

findings of fact, particular disputed fact number eight, 

submitted in opposition to Gardiner's motion for summary 

judgment. This factual submission presents evidence that 

Gardiner knew the government thought his rates were too 

high and that the government negotiated with Gardiner to 

reduce his charges. It does not, however, show that there 

was a contract term that Gardiner would be paid only those 

amounts that FEMA found to be reasonable. 

As a "general rule" we do not review "issues raised for the 

first time at the appellate level." United Parcel Serv. v. 

 21 
Intern. Broth. Local No. 430, 55 F.3d 138, 140 n. 5 (3d Cir. 

1995). Although we have the discretion to review an

argument not raised below, we will ordinarily refuse to do 

so. Id.; see also Singleton v. Wulff, 428 U.S. 106, 120-121 

(1976). WAPA's argument that "evidentiary submissions" 

supporting its new claim preserved the issue on appeal is 

essentially a claim that new arguments should be 

considered on appeal, as long as the evidence supporting 

them was submitted to the district court. In United Parcel, 

however, UPS failed to raise a legal theory -- that a clause 

of the contract violated public policy -- and we refused to 

consider that theory on appeal, although the evidence in 

support of the theory was presented to the district court. 

We considered a new legal theory for the first time on 

appeal in Salvation Army v. N.J. Dept. of Community Affairs, 

919 F.2d 183, 196 (3d Cir. 1990), but only because the 

case law on the subject had changed. 

WAPA has not persuaded us that this is a case in which 

we should disregard our general rule and consider on 

appeal a new argument in opposition to summary 

judgment. Nothing unusual, like an intervening change in 

the law or the lack of representation by an attorney, 

prevented WAPA from raising this issue below. This claim, 

moreover, contradicts WAPA's main argument -- that it had 

no contract with Gardiner. WAPA may have decided not to 

take such a position in the district court for fear that it 

would undermine WAPA's central claim. Under these 

circumstances, in the interest of fairness to the district 

court and to the plaintiff, not to mention the conservation 

of judicial resources, we will not consider this claim.8 

_________________________________________________________________ 

8. We will also affirm the award of pre-judgment interest. WAPA has 

argued in opposition to this award that pre-judgment interest cannot be 

awarded against the United States or against a party, like WAPA, that 

has a right to seek indemnity from the United States. Although the 

principle of sovereign immunity bars the collection of pre-judgment 

interest against the United States, courts have not extended the United 

States' sovereign immunity to a private party, even when the private 

party has an explicit indemnity agreement with the United States. See, 

e.g., Rochester Methodist Hospital v. Travelers Insurance Co., 728 F.2d 

1006, 1012-13 (8th Cir. 1984). In reaching this conclusion, the 

Rochester court reasoned that sovereign immunity bars recovery only 

 22 
V. Conclusion 

For the reasons stated above, we will affirm the district 

court's denial of WAPA's Rule 19(b) motion and we will also 

affirm the judgment in favor of Gardiner. 

A True Copy: 

Teste: 

Clerk of the United States Court of Appeals 

for the Third Circuit 

_________________________________________________________________ 

when the suit is in fact a suit against the United States; in a suit for 

damages against a government agent, it is the agent who is liable even 

if the agent then turns to the United States for reimbursement. The 

present case is in fact an easier one because WAPA does not have an 

explicit indemnity agreement with the federal authorities. For this 

reason, a verdict against WAPA does not indirectly constitute a 

determination of liability against the United States. 

WAPA further contends that it would be inequitable to award prejudgment interest against WAPA because the non-payment to Gardiner 

was a result of FEMA's failure to pay WAPA after FEMA had assured 

WAPA that its payments to Gardiner would be reimbursed. This 

contention is merely a recharacterization of WAPA's argument that 

reimbursement by FEMA was a precondition to its duty to pay Gardiner. 

Since we have upheld the district court's entry of summary judgment for 

Gardiner, it follows that the award of pre-judgment interest is equitable. 

The district court has determined that WAPA's duty to pay on the 

contract was independent of any reimbursement agreement between 

WAPA and the US government. Whether it is equitable to award prejudgment interest to Gardiner relates to the relationship between 

Gardiner and WAPA, and WAPA failed to pay on the contract when 

payment was due. 

 23