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D ock e t 96-7565

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. e du/thir dc ir c uit_1998/136Filed 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 Isl ands
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 Wa ter and Power Authority (WAPA),1 and officials of the Unite d States government immediately began efforts to restore wat er service, using fresh water wells. Because the equip ment being used at each well site was in high demand on the island, FitzRoy Gardiner and his company, Western T rading Enterprises (Gardiner), were hired to perform secur ity and maintenance service at the wells 24 hours a day. Th e bill for Gardiner's services over the following ten week s came to $1,245,178, of which WAPA has paid $616,538. In thi s action Gardiner sought the balance from WAPA. WAPA

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1. WAPA has the statutory obligation to provide wat er for the residents of the Virgin Islands, V.I. Code Ann. tit. 30 S 105 (a).

2based 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 Sta tes and WAPA worked together to implement a water distribution system using about 45 fresh water well s located in well fields owned by WAPA. Each well req uired a pump and a generator to power it. From the wells, w ater was pumped into storage tanks and then into pressur ized 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 apparen tly 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 prob lem despite a tightly-enforced curfew to prevent violen ce and looting. The lack of electric power on the Island m ade the generators very desirable; the wells themselves wer e located in remote areas, covered with dense vegetation up t o six and a half feet high. WAPA employees provided secur ity services during the first few days of October, unti l several employees were threatened by persons who were attem pting to steal the generators and pumps. The United State s Army, the National Guard, and the Virgin Islands Po lice Department refused to provide the necessary 24 hour security. WAPA acknowledges that providing the secu rity

was hazardous work.

Bruce Green, an employee of the United States Geolo gical Survey assigned by FEMA to work on the Islands, and Romeo Cipriani, Superintendent of the Water Distrib ution System for WAPA on St. Croix, met with Gardiner in early October to discuss security at the well fields. Gar diner had previously worked for WAPA and was already doing wo rk for WAPA on another project. Green and Cipriani rev iewed the problems at the wells with Gardiner, and Gardin er orally agreed to provide both security and maintena nce services 24 hours a day. According to Bruce Green's

3deposition, Gardiner was told at this initial meeti ng that

WAPA would be reimbursed by the federal government for the payments to Gardiner. Gardiner, on the other ha nd,
testified that he did not learn this until later. T here was no written contract. Gardiner began to perform the ser vices immediately. He had people in the field within hour s. By all accounts, Gardiner and his crews were resourceful a nd 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, adjustin g carburetors, and repairing and replacing filters, m ufflers, starter cords, and other parts. When three generato rs failed, Gardiner replaced them with his own.

On October 25, 1989, Gardiner, Cipriani, and Fred Rounsaville of the Army Corps of Engineers met to d iscuss 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" we re "excessive and I requested a meeting with Mr. Cipri ani of WAPA, the contractor and Mr. Green." Rounsaville al so 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 resi dence [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 discusse d 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

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

The court's findings of fact and conclusions of law, wh ich followed the bench trial on damages, reflect that the billing was actu ally somewhat more complicated. Findings of Fact and Conclusions of La w at PP 17-22. The billing rates and amount of damages are not at issu e on this appeal except that WAPA has challenged the award (but not the amount) of prejudgment interest.

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

the day and $25 per hour at night, beginning with t he sixth
week of service. WAPA maintains that none of its em ployees participated in this meeting.

As discussed by Green, Cipriani, and Gardiner at th eir 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 Novem ber 7. The checks to Gardiner were signed by Nellon Bow ry, 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 th e Governing Board's Finance Committee, since H urricane Hugo, the Governing Board informally granted the Executive Director the authority to temporar ily negotiate, sign and execute contracts and ot her transactions of the Authority for amounts in excess of $75,000, without prior consent of the Govern ing Board; therefore,

BE IT RESOLVED BY THE GOVERNING BOARD: that the Executive Director of the Authority, Alb erto Bruno- Vega, be authorized to negotiate, sign and e xecute contracts and other necessary transactions o f 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 th e damage caused by Hurricane Hugo. Said authorization shall terminate upon the entry of a resolution of the Governing Board expressly terminating said t emporary authorization.

After paying Gardiner for the last two weeks of Oct ober, WAPA refused to make any further payments. WAPA pai d

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

services. Gardiner billed WAPA a total of $1,245,17 8 for the
ten weeks of services. Gardiner testified that he w as shown
a check in the middle of November that had been mad e out to him by a WAPA employee, but that he was told the re 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. Gar diner 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, WA PA paid Gardiner and then sought reimbursement from th e United States. WAPA claims that it stopped paying G ardiner when it realized that FEMA might not reimburse it f or 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"), w hich accompany requests for assistance after a natural d isaster, 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 owe d. This figure was further reduced by the Inspector Ge neral's review of the billing after Gardiner had finished t he work. After this audit, FEMA agreed to reimburse WAPA a t otal of only $443,000.

II. Procedural Background

Gardiner filed suit against WAPA in November, 1990, in the District Court of the Virgin Islands. The compl aint 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 compl aint against FEMA, the Army Corps of Engineers and the U nited States Geological Society. The third party defendan ts, along with Gardiner, moved to dismiss. The court granted the motion on April 17, 1991, in a two page order, whic h read in part:

6The third party plaintiff having conceded th at the

jurisdiction of the third party claim belong s with the United States Claims Court; and It appearing that the United States Claims C ourt does not have jurisdiction over the plaintiff's c laim 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 defendant s 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 Transfe r Entire Matter to the United States Claims Court." WAPA arg ued in support of the second motion that under 28 U.S.C. S 1631,
the district court could transfer the case to the C ourt 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). Gardin er appealed. The Court of Appeals for the Federal Circ uit reversed and remanded on September 2, 1993. The Cou rt of Appeals determined, in part, that "the district court relied on 28 U.S.C. S 1406(c) as it existed prior t o 1982 in transferring this case to the claims court," that t his statute "was repealed by Congress in 1982," and no longer provided the court with authority to transfer the c ase. The Court of Appeals also noted that WAPA did not alleg e in its pleadings that it had a contract with the United St ates and that WAPA therefore did not state "a claim upon whi ch 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 dist rict 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 strug gled 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

7evidence of FEMA assurances" and the evidence of an

agreement between the plaintiff and the United Stat es "to disprove the plaintiff 's claim of a contract betwe en it and WAPA." WAPA filed a notice of appeal on January 19, 1994. The appeal was dismissed for lack of jurisdiction o n November 18, 1994.

The district court granted a motion by Gardiner for partial summary judgment on August 17, 1995. The co urt held that Gardiner and WAPA had a binding contract, but reserved the issue of damages for trial. After a be nch trial on January 23 and 24, 1996, the court issued findin gs 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 a nd that WAPA was liable for prejudgment interest in the amo unt of $377,184. The interest represented 9% simple intere st per annum from December 9, 1989, to August 8, 1996. The court entered judgment for Gardiner in the amount o f $1,005,824. The court also awarded Gardiner attorne y's fees and set a briefing schedule to determine the a mount. WAPA appealed to this Court on September 12, 1996.

The district court had jurisdiction of this case un der 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 Proced ure 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 U nited States was not a party, WAPA was not able to demons trate
that Gardiner contracted with the United States ins tead of with WAPA. WAPA bases this claim in part on the fac t that it had only limited discovery against the United St ates. WAPA also contends that this action will impact the United
States because the decision will resolve some of th e terms of the contract, such as the amount that Gardiner i s entitled to recover. Finally, WAPA claims that fail ure to include the United States as a party forces WAPA to assume the risk of inconsistent obligations.

8In determining whether a district court should have

dismissed a case under Rule 19(b) for failure to jo in an indispensable party, we must make a preliminary determination that the non-joined party cannot be j oined under Rule 19(a). Only if a party cannot be joined under Rule 19(a), does Rule 19(b) come into play.3 Shette r v.

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

(a) Persons to be Joined if Feasible. A pers on who is subject to service of process and whose joinder will no t 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 dispositi on 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 part ies subject to a substantial risk of incurring double, multip le, or otherwise inconsistent obligations by reason of the cl aimed interest.

If the person has not been so joined, the co urt 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 d efendant, or, in a proper case, an involuntary plaintiff. If th e 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 Join der Not Feasible. If a person as described in subdivision (a)( 1)-(2) hereof cannot be made a party, the court shall determine whet her in equity and good conscience the action should proceed among t he 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 provision s in the judgment, by

the shaping of relief, or other measures, the pr ejudice can be lessened or avoided; third, whether a judgment render ed in the person's absence will be adequate; fourth, whether th e plaintiff will have

an adequate remedy if the action is dismissed f or nonjoinder.

(emphasis added).

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

1993); Janney Montgomery Scott, Inc. v. Shepard Nil es, 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 con clusions of law; as to subsidiary findings of fact we apply a clear error standard. HB General Corp. v. Manchester Part ners, L.P., 95 F.3d 1185, 1189 (3d Cir. 1996) (citing Jan ney, 11 F.3d at 404). Rule 19(b) determinations are reviewe d for an abuse of discretion. HB General Corp., 95 F.3d at 1 189.

Even assuming that the United States could not have been joined under Rule 19(a), we cannot conclude th at 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 whethe r 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 bei ng thus regarded as indispensable." The four factors listed in the Rule are not exhaustive, but they are the most impo rtant considerations in deciding whether to dismiss the a ction. Wright, Miller & Kane, Federal Practice and Procedu re 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 abs ence might be prejudicial to the person or those already parties," and to what extent such prejudice can be avoided. H ere, there is little danger of prejudice to the absent p arty -- the United States -- if this case goes forward without it. Indeed, the United States does not want to become a party t o the suit, strongly suggesting that its interests will n ot be impeded if the suit goes forward without it. See Si ndia 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 unconcerne d with any adjudication in its absence");4 see also P eregrine

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4. The first factor under Rule 19(b) overlaps consi derably with the Rule 19(a) analysis. Wright, Miller & Kane, Federal Prac tice and Procedure

S 1608 at 91.

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

Moreover, there is no prejudice to Gardiner in excl uding 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 o ut, WAPA deposed a number of federal officials: Fred Rounsaville, Edward Orchowski, Steve Singer, Thomas Barbee, Adair Martin, David Shriver, Wynn Fuller, C olonel Cox, and Gerald Connolly. Despite the depositions, WAPA
claims that it was unable to obtain relevant "inter nal 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 i nformation that it needs. For example, WAPA might, argue that it could not show which federal officials had the implied au thority 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 contra cting officers on St. Croix were immediately after Hugo h it. WAPA has not, however, made any such contention. Given t he extensive discovery permitted in this case, WAPA sh ould be able to identify any missing information with more detail than the phrase "internal documents."

WAPA also argues that it "runs the risk of inconsis tent adjudication of its rights" if the United States is not joined because, if Gardiner prevails, WAPA must then pursu e a remedy against the United States in a different act ion. The risk of inconsistent judgments, although mentioned specifically in Rule 19(a)(2)(ii), is relevant unde r Rule 19(b) as well. Schulman, 35 F.3d at 806. In general, howe ver, "a defendant's right to contribution or indemnity from an absent non-diverse party does not render that absen tee 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 i ts

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

Shepard Niles contended that Underwood, as a co-obl igor to the contract, was a party to be joined if feasible under Rule 19(a). If joined, Underwood would have destroyed di versity jurisdiction.

We concluded that the outcome of the case would be" res judicata or collateral estoppel as between Janney a nd 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 contributi on 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 Tr ust and Savings Association, 844 F.2d 150, 1054 (3d Cir. 19 88)). A defendant may implead the absent party under Federa l 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 l ack jurisdiction over the United States. Indeed, the th ird-party complaint which WAPA filed against FEMA, the Army C orps of Engineers, and the United States Geological Soci ety, was dismissed for lack of jurisdiction. But the reasoni ng of Janney -- if a defendant does not implead an absent party, there is no legal effect on its rights of contribut ion or indemnification -- applies with equal force here.6 WAPA is free to pursue any claim it has against the United States in

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5. Some courts, and Wright, Miller & Kane, reason t hat joint obligors to a contract "are treated as Rule 19(a) parties, but are not deemed indispensable under Rule 19(b). Wright, Miller & Ka ne, Federal Practice

& Procedure S 1613 at 182-183."

6. WAPA suggests that the terms of a contract betwe en it and the United States could be determined in the litigation betwee n WAPA and Gardiner. Specifically, WAPA points to the issue of what rate s Gardiner was entitled to receive. It is not clear, however, how the determination of

the
rates in a contract between Gardiner and WAPA neces sarily 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 1 32.01[1] (Matthew Bender 3d ed.)12a separate action. We recognize that this is a less

convenient remedy for WAPA. Nevertheless, it is a m eans 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 th e United States. In support, WAPA points to the distr ict
court's statements that the involvement of the Unit ed States was not "material" or "pertinent." These sta tements reflect, however, the district court's conclusion t hat
Gardiner had demonstrated that Gardiner and WAPA ha d a contract, making summary judgment appropriate. If t he
district court determined that a contract existed b etween WAPA and Gardiner, Gardiner was entitled to summary judgment, regardless of what agreement WAPA may hav e had with the United States. We will consider the di strict court's grant of summary judgment in the next secti on. 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 th at certain activities by federal officials were not"ma terial" to
its determination that Gardiner's contract was with WAPA
was made in the context of the consideration of sum mary judgment and it has no bearing on whether joinder o f the United States was feasible under Rule 19(b).

The third factor under Rule 19(b) is "whether a jud gment rendered in the person's absence will be adequate." This
element allows the court to consider whether the re lief it may grant will be an adequate remedy for the plaint iff. Provident Bank & Trust Co. v. Patterson, 390 U.S. 1 02, 112 (1968). Wright, Miller & Kane, Federal Practice & P rocedure S 1608 at 116. This factor weighs, in our view, in favor of WAPA. WAPA's claim, as construed by the district co urt, will be resolved in one action. Moreover, as we not e above, the possibility that the defendant may have a claim for contribution or indemnity does not render an absent ee indispensable. The right to contribution and indemn ity should not, therefore, be considered to cause inade quacy of the resulting judgment.

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

remedy if the action is dismissed, counsels strongl y 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, fo r a conclusive and mutually consistent resolution of th eir 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 Unite d States; thus, he does not have a remedy in the Court of Cla ims. Unless Gardiner claims a contractual relationship w ith the United States, the Court of Claims simply has no jurisdiction over the case. The Court of Appeals fo r the Federal Circuit reversed Judge Brotman's transfer o f the case to the Court of Claims for exactly this reason -- that court had no jurisdiction over a dispute between WA PA 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 Co urt of Claims implies that Gardiner has to rewrite his cla im to
assert that his contract was with the United States . Such a revision would, however, provide no remedy for th e claim that Gardiner makes against WAPA for breach of cont ract.

With these considerations in mind, we conclude that the district court did not abuse its discretion in deny ing 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. In deed, Gardiner would have had to have alleged something t hat it
maintains did not exist -- a contract with the Unit ed States. Moreover, WAPA's claim of prejudice in disc overy matters, as we have seen, adds little. For these re asons, it
was well within the discretion of the district cour t to deny
WAPA's motion.

IV. Summary Judgment

In granting summary judgment for Gardiner, the dist rict court reasoned that neither Cipriani for WAPA nor G reen for FEMA had the authority to enter into a contract on behalf of the parties that they represented. The di strict

14court concluded, however, that the actions of Cipri ani were

later ratified by Bruno-Vega and the WAPA Board, re sulting in an enforceable contract. On the other hand, the court reasoned that there "is simply no evidence of ratif ication of the agreement by any other individual who could hav e ratified a contract entered into by Mr. Green." The court accordingly granted summary judgment on the issue o f 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. 19 91).

WAPA make three basic arguments that summary judgment for Gardiner was error. First, it points t o evidence
that FEMA officials ratified Green's actions and ma de binding the alleged contract between Green and Gard iner. Second, WAPA argues that in this emergency situatio n where the United States played a large role in nego tiating and overseeing the contract, WAPA can recover if it proves an implied-in-fact contract, even if no "contractin g officer" with specific authority to bind the United States a pproved 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 publi c through "contracting officers." LDG Timber Enterpri ses, Inc. v. Glickman, 114 F.3d 1140, 1143 (Fed. Cir. 1997). The Federal Acquisition Regulation ("FAR") defines a co ntracting officer as "a person with the authority to enter in to, administer and/or terminate contracts and make rela ted determinations and findings." 48 CFR S 2.101 (1996) . The regulations also provide that "[c]ontracts may be e ntered 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 onl y to the extent of the authority delegated to them." 48 CFR S 1.602- 1(a). Part 4401 of FAR "sets forth policies and pro cedures concerning the Federal Emergency Management Agency Acquisition Regulation (FEMAAR) System." 48 CFR S 4401.000. This part states the qualifications req uired for contracting officers within FEMA and explains that except

15for "disaster-related activities and unusual circum stances

as determined by the head of the contracting activi ty, 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 wit h specific authority can bind the government contract ually; even those persons may do so only to the extent tha t their authority permits. Moreover, a party who seeks to c ontract with the government bears the burden of making sure that the person who purportedly represents the governmen t actually has that authority:

Whatever the form in which the Government fu nctions, anyone entering into an arrangement with the Government takes the risk of having accurate ly ascertained that he who purports to act for the Government stays within the bounds of his au thority. The scope of this authority may be explicitl y defined by Congress or be limited by delegated legislat ion, properly exercised through the rule-making p ower. And this is so even though, as here, the agent h imself may have been unaware of the limitations upon hi s 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 exp resses the duty of all courts to observe the conditions define d 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 3 84-385. Other policy grounds supporting this rule were stat ed more recently by the Federal Circuit: "The United States Government employs over 3 million civilian employee s. Clearly, federal expenditures would be wholly uncontrollable if Government employees could, of th eir 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 t hat Gardiner actually had a contract with the United St ates, not WAPA, is defeated by WAPA's failure to identify a contracting officer who could have bound the United States.

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

authority; neither did Gerald Connolly, the federal coordinating officer for the Virgin Islands disaste r, or Steven Singer, the deputy federal coordinating offi cer for St. Croix. WAPA argues that it has presented evidence o f ratification of the contract by "senior officials i n the FEMA disaster relief effort," namely Connolly and John S wanson. WAPA has pointed to absolutely no evidence that Swa nson had the authority to contract on behalf of the gove rnment. 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 li tigation, it deposed at least five FEMA officials and has poi nted to no unanswered question as to who the contracting offic ers were in FEMA or on St. Croix. Because there is no e vidence to support WAPA's claim that the contract was ratif ied by someone in the federal government who had the autho rity to do so, summary judgment was appropriate unless, as WAPA also argues, the approval of a contracting off icer was
not necessary.

WAPA maintains that no contracting officer needed t o 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 sit uations." To prove an implied-in-fact contract, the party all eging that contract must show the same elements required in an express contract: offer, acceptance, and considerat ion. See Trauma Services Group v. United States, 104 F.3d 13 21, 1325 (Fed. Cir. 1997). Proof of an implied-in-fact contract comes not from an express agreement, however, but f rom "conduct of the parties showing, in the light of th e surrounding circumstances, their tacit understandin g." 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 impli ed-in-fact contract, like an express contract, must include authorization (whether implied or express) by an ag ent with the authority to bind the United States. Trauma Ser vices, 104 F.3d at 1326; City of El Centro, 922 F.2d at 82 0.

WAPA argues that the required authorization can be implied from the high-ranking officials who tacitly approved

17the 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, evidenc e that federal officials played a major part in negotiatin g and overseeing Gardiner's contract to provide security and
maintenance services. This evidence also indicates that the federal government may have benefitted from the sec urity services because of its ownership of the generators . Federal officials also negotiated fee reductions on at leas t two occasions; in one instance WAPA claims that none of its officials were even present. WAPA sought and obtain ed
assurance from Rounsaville that the rates were acce ptable to FEMA officials. Apparently, Rounsaville also cle ared the rates with John Swanson and Gerald Connolly, FEMA's coordinating officer in the Virgin Islands. The Hur ricane Hugo emergency required, at least initially, quick action by
WAPA and federal officials.

We cannot agree with WAPA, however, that this evide nce creates a genuine issue of material fact as to whet her the
actions of the senior FEMA officials bound the Unit ed 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 bin d the government. Trauma Services, 104 F.3d at 1326. "Sen ior" officials may or may not have contracting authority ; WAPA has come forward with nothing suggesting that those involved with the procurement of Gardiner's service s did. See City of El Centro, 922 F.2d at 821 (placing bur den of showing that government agent had requisite contrac ting authority with the party seeking to show an implied -in-fact contract with the government).7

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7. In some situations authority to bind the governm ent can be implied "when such authority is considered to be an integra l part of the duties assigned to a [g]overnment employee." H. Landau & C o. v. United States, 886 F.2d 322, 324 (Fed. Cir. 1989) (quoting J. Cibi nic & R. Nash, Formation of Government Contracts 43 (1982)). WAPA has not advanced this argument however, and has accordingly not poin ted to evidence specifically suggesting that the authority to bind the government was "necessary or essential" to the duties of the feder al officials involved.
Roy v. United States, 38 Fed. Cl. 184, 188 (1997). It s eems that to the extent

18Neither does the urgency of the situation suggest a

different outcome. WAPA relies on Halvorson v. Unit ed States, 126 F. Supp. 898 (E.D. Wash. 1954), in whic h the court concluded that under the emergency conditions created by a blizzard, the United States was respon sible for
the costs incurred when federal officials directed
contractors to remove snow from the interior of a b uildings
that was under construction. The contractors had ma de clear that the building should not include uncovere d ventilation slots, but the Corps of Engineers insis ted that it should. As the contractors predicted, snow blew int o the interior of the unfinished buildings, threatening t o do substantial damage if it melted. The local job insp ector, and his immediate supervisor, directed the contractors to remove the snow, which significantly reduced damage s. The Corps of Engineers refused to pay for the removal. The

court reasoned that:

Whether or not the Resident Inspector, Mr. J ackson, and his supervisor, the Resident Engineer, h ad authority to bind the government by express contract, or to modify the written contract by oral ag reement, they did, in the emergency situation created by the

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such authority was an integral part of the duties a ssigned to the first officials that arrived on the Island, it would not extend to a contract

for services lasting ten weeks. Moreover, application o f 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 fr om a joint bank account that provided advance financing to governme nt contractor, may have had the implied authority to bind the governme nt. A supplier to the contractor sought letters from the federal official s -- who were not contracting officers -- guaranteeing payment from t he joint bank account. The officials provided two such letters, t he contractor did not pay, and the government argued that its guarantee w as invalid because the officials lacked authority to bind it. The cour t concluded that the explicit authority to draw checks on the account, c onsidered with the responsibility of finding suppliers, "may have carr ied with it the implicit authority to assure suppliers that they would be pa id 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 whi ch further authority could be implied.

19damage done by the blizzard, have authority to direct

the contractors to proceed at once to minimi ze 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 eit her to the government -- the party who was benefited by th e removal and whose negligence created the problem in the first place -- or to the contractor had who recomme nded constructing the building so as to avoid the proble m.

In this case, the existence of a contractual relati onship
between Gardiner and the United States is itself at issue. Standard Form 270, provided by the government of th e Virgin Islands for use in requesting reimbursements from the United States, explains that

FEMA is not a party to this contract. Disput es arising between the parties to the contract will be resolved between the contractual parties by such mean s 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 dis putes over payment. Moreover, even if the government bene fited from Gardiner's services because it owned the gener ators,
WAPA's benefit was at least as substantial because Gardiner enabled WAPA to restore drinking water, an d ultimately to charge its customers for that water.

Moreover, despite the devastation created by Hurric ane Hugo and the urgent need to supply a fresh water to the island, the policy implicit in Halvorson does not a pply here. In Halvorson, the contractor's efforts were directe d 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

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

melted before it was removed. 126 F. Supp. 900. In this case, on the other hand, Gardiner provided emergenc y services for ten weeks, the provision of those serv ices ultimately involved the highest level officials in WAPA, and the emergency brought federal officials with contra cting powers to the Virgin Islands, although WAPA has pre sented
no evidence that these officials were involved in t his contract. If this case concerned only emergency ser vices provided in the first hours or days after the hurri cane, we would consider this claim in a different light, par ticularly in view of WAPA's evidence of significant involvement of federal officials in all aspects of procuring Gardi ner's services. But the federal government reimbursed WAP A in the amount of $443,000, which paid for more than th efirst two weeks of services by Gardiner. WAPA had ten wee ks during which it could have made sure that a contrac ting 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, whome ver it was with, contained a term that payment would be ma de only in amounts FEMA found were reimbursable." Gard iner
asserts that this issue was not raised in the distr ict court and should not be considered on appeal. WAPA respon ded, in its reply brief, that the "evidentiary submissio n on this point in district court refutes Gardiner's contenti on that this issue is being raised for the first time on ap peal." At oral argument, WAPA maintained that this issue had been raised to the district court through WAPA's dispute d findings of fact, particular disputed fact number e ight, submitted in opposition to Gardiner's motion for su mmary judgment. This factual submission presents evidence that Gardiner knew the government thought his rates were too high and that the government negotiated with Gardin er to reduce his charges. It does not, however, show that there was a contract term that Gardiner would be paid onl y 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 S erv. v.

21Intern. 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 refus e to do so. Id.; see also Singleton v. Wulff, 428 U.S. 106, 120-121 (1976). WAPA's argument that "evidentiary submissio ns" supporting its new claim preserved the issue on app eal is essentially a claim that new arguments should be considered on appeal, as long as the evidence suppo rting
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 re fused to consider that theory on appeal, although the eviden ce 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 wh ich we should disregard our general rule and consider o n appeal a new argument in opposition to summary judgment. Nothing unusual, like an intervening chan ge in the law or the lack of representation by an attorne y, 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 no t 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 d istrict court and to the plaintiff, not to mention the cons ervation of judicial resources, we will not consider this cl aim.8

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8. We will also affirm the award of pre-judgment in terest. WAPA has argued in opposition to this award that pre-judgmen t interest cannot be awarded against the United States or against a part y, like WAPA, that has a right to seek indemnity from the United State s. 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 Ins urance Co., 728 F.2d 1006, 1012-13 (8th Cir. 1984). In reaching this con clusion, the Rochester court reasoned that sovereign immunity ba rs recovery only

22V. Conclusion

For the reasons stated above, we will affirm the di strict court's denial of WAPA's Rule 19(b) motion and we w ill also affirm the judgment in favor of Gardiner.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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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 re imbursement. The present case is in fact an easier one because WAPA does not have an explicit indemnity agreement with the federal autho rities. For this reason, a verdict against WAPA does not indirectly constitute a determination of liability against the United State s.

WAPA further contends that it would be inequitable to award prejudgment interest against WAPA because the non-paym ent to Gardiner was a result of FEMA's failure to pay WAPA after FE MA had assured WAPA that its payments to Gardiner would be reimbur sed. This contention is merely a recharacterization of WAPA's argument that reimbursement by FEMA was a precondition to its dut y 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 agree ment between WAPA and the US government. Whether it is equitable to award prejudgment interest to Gardiner relates to the relati onship between Gardiner and WAPA, and WAPA failed to pay on the co ntract when payment was due.

23