NOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-5008 NORTH HARTLAND, L.L.C., Plaintiff-Appellant,

v. UNITED STATES, Defendant-Appellee.
John S. Lopatto, III , of Washington, DC, argued for plaintiff-appellant. Timothy P. McIlmail , Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendantappelllee. With him on the br ief were Jeanne E. Davidson , Director, and Mark A. Melnick , Assistant Director. Appealed from: United Stat es Court of Federal Claims Judge Christine O.C. MillerNOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-5008 NORTH HARTLAND, L.L.C., Plaintiff-Appellant,

v. UNITED STATES Defendant-Appellee.

Appeal from the United States Court of Federal Claims in Case No. 06-CV-495, Judge Christine O.C. Miller.

__________________ _________ DE CIDED: February 2, 2009

__________________ _________ Before RADER, SCHALL, and DYK, Circuit Judges

. RADER, Circuit Judge

. The United States Court of Federal Claims dismissed North Hartland L.L.C.'s (North Hartland's) case against the United States for lack of s ubject matter jurisdiction. North Hartland had sued the United States for br each of contract, alleging that it had a contractual right to purchase a hydroelec tric plant located on the Ottaquechee River near North Hartland Lake, Vermont. Becaus e a series of transactions left North Hartland with no contractual rights against t he Government, this court affirms the trial court's finding of no privity of contract bet ween North Hartland and t he United States.I. Vermont Electric Gener ation & Transmission Cooper ative, Inc. (VEG&T) originally owned and operated the North Hartland Lake hydroe lectric plant. In 1996, however, VEG&T entered into a Chapter 7 bankruptcy. The bankruptcy trustee then gave full authority to direct the transfer and delivery of VEG&T’s assets in the North Hartland Lake plant to the United States Department of Agriculture Rural Utilities Services (RUS), VEG&T’s largest creditor. On April 28, 1998, RUS issued a “Requ est for Proposal” from prospective purchasers of the plant. In response, Contech Development Company (Contech) offered RUS $2.407 million for the facility. RUS accepted Contech’s offer to purchase the plant as is” via a letter contract dated September 28, 1998. The letter contract served as the contract between Contech a nd RUS until December 16, 1999, when the parties executed the Asset Purchase Agre ement (APA). The APA listed the purchase price for the plant at $1.4 million and further contemplated a r educed sale price if closing occurred on or before March 15, 2000. The United States Bankruptcy Court for the District of Vermont appr oved and authorized this sale. Despite the terms of the APA, RUS never closed the sale of the North Hartland Lake plant with Contech. Under the APA, however, Contech retained the right to purchase the plant. Contech later assigned th is right to North Hartland L.L.C. of New Hampshire (North Hartland of New Hampshir e). Notably, although Appellant North Hartland shares its name with North Hartland of New Hampshire, as explained below, these two North Hartlands ar e not the same entity. Th e exact date of Contech’s assignment of the APA to North Hartland of New Hampshire is unclear from the

2008-5008 2documentary evidence presented in this case; however, it appears that the assignment occurred close to the formation of the APA and the failed closing between RUS and Contech. North Hartland of New Hampshire suffere d the same fate as Contech under the APA. Indeed, according to Appellant, RUS not only refused to close on the sale to North Hartland of New Hampshire, but also invited bids on the plant in contravention of the APA. In addition to losing the chance to purchase the hydroelectric plant, North Hartland of New Hampshire encountered organizational difficulties central to this appeal. The New Hampshire Secretary of State dissolv ed North Hartland of New Hampshire on November 1, 2002. Nort h Hartland, L.L.C. v. United States , 78 Fed. Cl. 172, 175 n.4 (2007). The Secret ary reinstated North Hartl and of New Hamp shire under the name “Vermont Generatin g, LLC” (VGL), effective December 9, 2004. Id. On October 6, 2004, Appellant North Hartland organized as a Virginia domestic limitedliability partnership. Id. This Virginia partnership was formed “to hold all of the equity in the soon-to-be VGL.” Id. Unable to sustain the cost and aggravat ion of RUS’s delay, Appellant North Hartland entered into an agree ment with Concord Hydro Asso ciates (Concord) for the sale of VGL and its equity interests in the North Hartland Lak e power plant to Concord. Appellant North Hartland and Concord ent ered an “Agreement for the Purchase and Sale Vermont Generating, LLC Equity Interests” (APS). In that agreement, North Hartland represented “that it wa s ‘formed in the Commonwealt h of Virginia on October 6, 2004, to hold all of the equi ty interest in and to the Vermont Generating, LLC,’ and

2008-5008 3that VGL held the right to purchase the No rth Hartland Lake plant, under the APA, as the assignee of [Contech].” North Hartland , 78 Fed. Cl. at 175 ( quoting APS at 1, 3). North Hartland “further repr esented that ‘[t]he only assets of [VGL] are intangible contract rights relating to the North Hartland Project, including [plaintiff's] interest in the APA.’” Id. (quoting APS at 7). Under the terms of the APA, North Hartland agreed to sell all equity interests in VGL to Concord for $465,000 plus interest. No rth Hartland was to “‘sell and deliver to [Concord], and [Concord was to] purchase and ta ke title to and delivery of, all equity units of [VGL’s] limited liability company inte rests owned by [Appe llant] (the ‘Shares’), representing 100% of the author ized, issued, and outstanding equ ity interests in [VGL].’” Id. (quoting APS at 4). North Hartland was to “‘prepare an assignment of Interest, in the form attached as Exhibit A, by which [Contec h] and [Appellant] shall release, discharge, and assign to [Concord] all right, title or interest that either has in the [VGL] or the APA.’” Id. (quoting APS at 6). The APS also recited t hat “‘[t]he transaction contemplated by this Agreement [was] a purchase by [Concord] and a sale by [plaintiff] of all equity interests in [VGL], which [plain tiff was to] convey to [Concord] free and clear of any claims and/or encumbrances on VGL, and free and clear of any claims or encumbrances of affilia ted entities.’” Id. (quoting APS at 4). The parties completed their transaction under this agreement. In January 2005, RUS sold the plant to Conc ord. North Hartland did not sue the Government for breach of contract until J une 30, 2006, however, mo re than a year and a half after it sold VGL and its interest in the APA to Concord. Accordingly, the Government moved to dismiss North Hart land’s claim pursuant to RCFC 12(b)(1) for

2008-5008 4lack of subject matter jurisdiction. The Court of Federal Claims granted the government’s motion, finding no jurisdiction under the Tucke r Act. In particular, the Court of Federal Claims found t hat North Hartland did not show any privity of contract with the Government. Therefore, the trial court lacked jurisdiction to entertain North Hartland's claim. “Simply put, as [the Govern ment] argues, [Appellant] sold its privity of contract with the Government to Concor d and may not now assert it.” Id. at 181. North Hartland timely appealed. II. This court reviews the Court of Federal Claims’ dismissal for lack of subject matter jurisdiction without deference. See Taylor v. United States , 303 F.3d 1357, 1359 (Fed. Cir. 2002). When a Rule 12(b)(1) moti on merely challenges the facial sufficiency of the pleadings to establish subject matter ju risdiction, this court takes the allegations in the pleadings as true and construes them in the light most favorable to the complainant. See Scheuer v. Rhodes , 416 U.S. 232, 236 (1974). If, however, as here, the motion controverts the jurisdictional all egations in the pleadings, the movant is deemed to be challenging the factual basis for the court’s jurisdiction. Trentacosta v. Frontier Pac. Aircraft Indus., Inc. , 813 F.2d 1553, 1558-59 (9th Cir. 1987). In that case, the allegations in the complaint are not controlling. KVOS v. Associated Press , 299 U.S. 269, 277-79, (1936). T hus, in this circumstance, this court accepts only uncontroverted factual allegations as true fo r purposes of the motion. Gibbs v. Buck , 307 U.S. 66, 72 (1939). “All other facts underlying the c ontroverted jurisdictional allegations are in dispute and are subject to fa ct-finding by the district court.” CedarsSinai Medical Center v. Watkins , 11 F.3d 1573, 1584 (Fed. Cir. 1993).

2008-5008 5“In establishing the predicate jurisdictional facts, a court is not restricted to the face of the pleadings, but may review evid ence extrinsic to the pleadings, including affidavits and deposition testimony.” Id. Accordingly, this court must “scrutinize the evidence submitted by [Appellant] as support for its otherwise naked jurisdictional allegations in order to determi ne whether this case is inde ed ripe for adjudication.” Id. This court will not disturb t he evidentiary rulings of the Court of Federal Claims absent an abuse of discretion. See Taylor , 303 F.3d at 1359. III. The Tucker Act only confers jurisdiction on the Court of Federal Claims for suits against the government involving an “express or implied contract.” 28 U.S.C. §1491(a). Corollary to this rule is the maxim that the “government consents to be sued only by those with whom it ha s privity of contract.” Flex fab, L.L.C. v. United States , 424 F.3d 1254, 1263 (Fed. Cir. 2005) (quoting Eri ckson Air Crane Co. v. United States , 731 F.2d 810, 813 (Fed. Cir. 1984)). Thus, to preva il in defending agains t the Government’s motion to dismiss, North Hartland had to come forth with evidence that it was in privity of contract with the Government. See Cedars-Sinai , 11 F.3d at 1584. North Hartland did not present any such ev idence to the Court of Federal Claims, and it likewise has not supplied this court with a basis for finding pr ivity of contract. Indeed, even if we were to assume that No rth Hartland somehow was in privity with the government as a result of its VGL ownership, North Hartland voluntarily took itself out of the privity equation and extingu ished its rights to sue the government when, before filing suit, it sold VGL and VGL’s interest in t he APA to Concord. This sale effectively eliminated any jurisdiction the Co urt of Federal Claims or this court might have had over

2008-5008 6the present dispute by removing any cont ractual bond between the Government and North Hartland. The excerpts from the APS agreement between Concord and No rth Hartland set forth above underscore this point. Through that agreement, North Hartland conveyed VGL and its equity interests in VGL to Concord “‘free and clear of any claims and/or encumbrances on VGL, and free and clear of any claims or encumbrances of affiliated entities.’” North Hartland , 78 Fed. Cl. at 175 (quoting APS at 4). That agreement further conveyed “all right, title or interest” that North Hartland possessed in VGL or the APA. Id. (quoting APS at 6). These statements, and the other representations included in the APS, unequivocally reveal that North Hartland is not in privity of contract with the Government. Accordingly, the Court of Federal Claims correctly dismissed North Hartland’s claim for lack of s ubject matter jurisdiction. North Hartland attempts to avoid this out come by pointing to the non-interference clause of the APS as reserving its right to s ue the Government for breach of contract. That clause provides: 13. Non-Interference The Seller (including its owners, management member, family members, related and affiliated entities) and RUS have agreed to provide each other mutual concessions and mutual releases of liability. In the likely event RUS chooses to again requi re these mutual conce ssions from the Seller as a condition precedent to Closing under the APA, then this matter is exclusively reserved to be between the Seller and RUS , excluded from this Agreement, and all such considerat ion, if any, to be paid or caused to be paid by RUS is to t he sole and exclusive benef it of the Seller. The Seller agrees not to pursue any clai ms against the RUS until after the closing of the APA. APS at 14 (emphasis supplied). In its own words, this contract provision pertains to the situation where RUS requires additional concessions from North Hartland as a condition

2008-5008 72008-5008 8 precedent to closing. However, North Hartland “has not provided any evidence that RUS required such concessions upon the clos ing with Concord or indicated even the slightest possibility that such concessions may be required of plai ntiff in the future pursuant to the APA.” North Hartland , 78 Fed. Cl. at 180. Thus, despite vigorous argument to the contrary, this court detects no basis for North Hartland’s argument that §13 reserved to it the right to sue the Gove rnment for the alleged breach of contract under the APA. IV. Accordingly, for the foregoi ng reasons, this court affirms the decision of the Court of Federal Claims. AFFIRMED

COSTS Each party shall bear its own costs.