Court Opinion

ID: 8487103
Source: CourtListenerOpinion
Date Created: 2022-11-18 14:01:49.539086+00
Date Added: 2024-06-11T16:50:03.066169
License: Public Domain

In the United States Court of Federal Claims

 OXY USA INC.,

                    and

 CITGO PETROLEUM CORPORATION,                            No. 19-694C
                                                         (Filed: November 17, 2022)
                    Plaintiffs,
                                                         Contract; Motion to Dismiss;
 v.                                                      RCFC 12(b)(1); RCFC
                                                         12(b)(6); Summary Judgment;
 THE UNITED STATES,                                      Anti-Assignment Act;
                                                         Liability
                   Defendant.

Daniel M. Steinway, Washington, DC, for Plaintiffs.

Matthew Paul Roche, Civil Division, United States Department of Justice, Washington, DC, for
Defendant.

                                   OPINION AND ORDER

LERNER, Judge.

       This case concerns a series of contracts involving Plaintiffs OXY USA Inc. (“Oxy”) and
CITGO Petroleum Corporation (“Citgo,” together the “Oil Companies”) and the United States
government related to the production of high-octane aviation gasoline and butadiene, a synthetic
rubber product, during the 1940s. See Compl. ¶¶ 1–2, ECF No. 1; Pls.’ Opposition to Def.’s
Renewed Mot. to Dismiss and Renewed Cross-Motion (“Pls.’ Cross Mot.”) at 5, ECF No. 49.

        During the Second World War, the federal government contracted with multiple
petroleum companies for the production of critical wartime commodities, such as aviation
gasoline (“avgas”) and butadiene. Many of these contracts contained language that the
government would reimburse the petroleum companies for various costs, including taxes or
property liability. In the intervening half-century, several of these petroleum companies have
incurred significant environmental cleanup costs under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (“CERCLA”) and state law equivalents. See
42 U.S.C. § 9601 et seq. This has spawned considerable litigation over the breadth of
indemnification claims by the petroleum product manufacturers. See, e.g., Shell Oil Co. v.
United States, 7 F.4th 1165 (Fed. Cir. 2021) (deciding res judicata issue and damages interest)
(“Shell Oil III”); Shell Oil Co. v. United States, 896 F.3d 1299 (Fed. Cir. 2018) (deciding
damages) (“Shell Oil II”); Shell Oil Co. v. United States, 751 F.3d 1282 (2014) (deciding
liability) (“Shell Oil I”); E.I. Du Pont de Nemours & Co. v. United States, 365 F.3d 1367
(Fed. Cir. 2004) (“DuPont”); Chevron USA Inc. v. United States, 155 Fed. Cl. 344 (2021); Exxon
Mobil Corp. v. United States, Nos. 09-165C, 09-882C (consolidated) (J. Lerner).
       In this case, the plaintiff oil companies Oxy and Citgo seek indemnification. This is the
second time that the Government moved to dismiss Plaintiffs’ contract claims and that Plaintiffs
cross-moved for partial summary judgment as to liability. For the reasons set forth below, the
Government’s motion is DENIED IN PART and GRANTED IN PART, and Plaintiff’s cross
motion is DENIED IN PART and GRANTED IN PART.
I.     Background

       A.      Factual Background

               1.      The Avgas Contract

         After the United States joined World War II, Congress granted the executive branch
expansive authority to overhaul the nation’s petroleum industry in support of the war effort. See
Compl. Ex. D at 5, ECF No. 1-6 (Plaintiffs’ claim letter). As part of the mobilization, the
Reconstruction Finance Corporation (“RFC”), an early predecessor to the General Services
Administration, established the United States Defense Supplies Corporation (“DSC”) “to procure
critical wartime-related commodities.” Compl. ¶ 7. Avgas was one such commodity. Shell
Oil III, 7 F.4th at 1167 (“Avgas became the most critically needed refinery product,” and the
federal government “recognized the need to quickly mobilize avgas production.”) (quoting Shell
Oil II 896 F.3d at 1303 and Shell Oil I, 751 F.3d at 1286) (quotation marks omitted); see
Compl. Ex. D at 5.
        In 1942, the DSC entered into a multi-year avgas production contract (“the Avgas
Contract”) with Cities Service Refining Corporation (“Cities Service”), an early-20th Century oil
company. Compl. ¶ 8. The Contract required “‘maximum’ quantities of avgas” and imposed
specific directives over price. Compl. Ex. D at 5 (noting that the government “told the refiners
what to make, how much of it to make, and what quality”). Petroleum manufacturers typically
agreed to the expanded production requirements and artificially low profit margins of these
wartime contracts because agencies like the DSC agreed to reimburse the manufacturers for a
wide range of potential production liabilities. See Shell Oil III, 7 F.4th at 1167; see also
Compl. ¶ 10.
        Under the Avgas Contract, the DSC agreed to pay “any new or additional taxes, fees, or
charges, other than income, excess profits, or corporate franchise taxes, which [Cities Service] may
be required by any municipal, state, or federal law in the United States or any foreign country to
collect or pay by reason of the production, manufacture, sale or delivery of the commodities
delivered hereunder [i.e., Avgas].” Compl. ¶ 10 (citing Ex. A at 11). Pursuant to the Avgas
Contract, Cities Service produced avgas for the government at the Lake Charles Refinery in Lake
Charles, Louisiana, from 1942 until the war ended in 1945. Id. ¶¶ 11–12; Pls.’ Cross Mot. at 24.

                                                 2
               2.     The Right of Way Agreement

        Like avgas, synthetic rubber was another commodity crucial to the mobilization effort.
Similar to the DSC, the RFC established the United States Rubber Reserve Company to contract
with the petroleum industry for the private production of synthetic rubber and related rubber
materials such as butadiene, a raw material used in the manufacture of synthetic rubber for tires
and tubes. Compl. ¶ 16; see Compl. Ex. D at 6–7, 7 n.16, 9 (describing butadiene as a “key
synthetic rubber raw ingredient[]”). These rubber production contracts followed a systematic
procedure. The government typically acquired a site and built a government-owned war
production plant—known as a “plancor”—which it then leased to a private manufacturer to
operate. Compl. Ex. D at 4, 6. The government would then purchase the entire output of the
plant through an operating agreement, as well as impose strict production directives and
limitations on sales. Id. at 6–7, 7 n.16.
       Accordingly, in 1942, the Rubber Reserve Company contracted with Cities Service to
produce butadiene at the government-owned Butadiene Plancor 706 located near the Lake
Charles Refinery. Compl. ¶ 8; see Compl. Ex. B, ECF No. 1-4 (Rubber Reserve Operating
Agreement). Under the butadiene production agreement (the “Operating Agreement”), Cities
Service agreed to produce butadiene. Compl. Ex. B at 2–3; Compl. Ex. D at 9; Compl. ¶ 20.
The government also leased Cities Service Butadiene Plancor 706, signing a Butadiene Lease
contract (the “Butadiene Lease” or “Lease”). See App. (“CFC-Appx”) at CFC-Appx45. Plant
construction ended, and production started, in 1944. Compl. Ex. D at 9.
       Due to wartime demands, the government quickly built Butadiene Plancor 706 “without
adequate waste processing facilities.” Id. Plaintiffs explain that the plant was “hastily
constructed to meet the pressures of wartime needs,” which caused significant contamination
with “significant, unintended impacts.” Pls.’ Cross Mot. at 6; Compl. ¶¶ 20–21. During the war,
the RFC did not divert funds or manpower to process waste. Compl. ¶ 23. In 1946, shortly after
the war ended, it commissioned a report on Butadiene Plancor 706’s waste impact, which
documented the significant environmental effect caused by the plant’s toxic waste. Id.; see also
Compl. Ex. D at 9.
        In December 1946, RFC and Cities Service entered into a new agreement—the Right of
Way Agreement (“ROW Agreement”)—to dispose of waste generated at the government-owned,
Cities Service-operated Butadiene Plancor 706. Compl. ¶ 24. Under the Agreement, Cities
Service “agreed to grant an easement and right-of-way to RFC” at the Lake Charles Refinery for
the construction of a “Butadiene Plant Effluent Disposal System.” Id.; see Compl. Ex. D at
9–10; see also Compl. Ex. C, ECF No. 1-5 (ROW Agreement). This system encompassed “an
RFC-owned pipeline to carry wastes generated by Butadiene Plancor 706 for disposal in a waste
unit—known as the ‘Surge Pond’—that was located at the Lake Charles Refinery.” Compl. ¶ 24.
       Like the Avgas Contract, the ROW Agreement included indemnification language. It
expressly provided that:
       Grantee [RFC] agrees to construct and maintain said pipe line in such condition
       that the escape of any products transported therein shall be prevented and should
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       the property of grantor or any other corporation, person or firm be injured or
       destroyed thereby grantee also agrees to assume and pay all damages resulting
       therefrom, and grantee also agrees to indemnify grantor for losses, claims,
       demands and suits for damages to property and injury to or death of persons,
       including court costs and attorneys’ fees, incident to or resulting from grantee’s
       exercise of the rights herein granted.
Compl. Ex. C at 2 (emphasis added); see also Compl. ¶ 27.
        Pursuant to the ROW Agreement, Cities Service produced butadiene at the plant
starting in 1944. Compl. Ex. D at 9. The federal government continued to own, and
Cities Service continued to operate, Butadiene Plancor 706 until it was sold to a Cities
Service joint venture in 1955. Id.; Compl. ¶ 2.
               3.     Intervening Years

        Over the past eighty years since production of avgas and butadiene commenced, Cities
Service’s corporate structure transformed through a variety of corporate mergers, re-
organizations, and re-brands. First, in 1955, RFC sold Butadiene Plancor 706 to a joint venture
made up of Cities Service’s parent company and Continental Oil Co., called Petroleum
Chemicals, Inc. (“PCI”). Def.’s Renewed Mot. to Dismiss (“Def.’s Mot.”) at 6, 12, ECF No. 46;
see also Compl. Ex. D at 7–8.
        Then, in 1963, Cities Service itself underwent a series of changes. It first merged into
Cities Service Petroleum Corporation, which later changed its name to Cities Service Oil
Company. Def.’s Mot. at 8; Pls.’ Cross Mot. at 8. This company then merged into Cities
Service Company (“CSC”). Def.’s Mot. at 8; Pls.’ Cross Mot. at 8. Cities Service Company
then again merged with Occidental Merger Corporation, a special-purpose entity created as a
subsidiary of Occidental Petroleum Corporation (“Occidental”) specifically for the purpose of a
merger. Def.’s Mot. at 8; Pls.’ Cross Mot. at 8; June 24, 2020 Hr’g Tr. at 8–10, ECF No. 32.
Cities Service Company survived this merger and became a subsidiary of Occidental. Def.’s
Mot. at 8; Pls.’ Cross Mot. at 8; June 24, 2020 Hr’g Tr. at 8–10.
       In 1982 and 1983, Cities Service Company formed two new subsidiaries and spun off
some of its assets. First, in 1982, Cities Service Company established a wholly-owned
subsidiary, Cities Service Oil and Gas Corporation (“CSOGC”). Def.’s Mot. at 8; Pls.’ Cross
Mot. at 9. Cities Service Company assigned this new entity certain assets, including the
Butadiene Plancor 706 plant. Def.’s Mot. at 8; Pls.’ Cross Mot. at 9. This company was later
renamed OXY USA, Inc.—the first plaintiff in the instant case. Def.’s Mot. at 9; Pls.’ Cross
Mot. at 9.
       Second, in 1983, Cities Service Company formed another subsidiary, Cities Service RMT
Corporation (“CSRMT”). Def.’s Mot. at 9–10; Pls.’ Cross Mot. at 8–9. The parent then
reorganized and transferred almost the entirety of its assets in the “Petroleum Products Group,” a
business group, to the Cities Service RMT Corporation subsidiary. Def.’s Mot. at 9–10; Pls.’
Cross Mot. at 9–11; see CFC-Appx130–36 (Restated Assignment and Assumption Agreement
                                                4
transferring assets).1 This transfer included Cities Service Company’s “refining, marketing, and
transportation assets,” which encompassed the Lake Charles Refinery, as well as the Avgas
Contract, ROW Agreement, and other rights. Pls.’ Cross Mot. at 8–9. Cities Service RMT
Corporation was later renamed Citgo—the second plaintiff. Id. at 9. Citgo has continued to own
and operate the Lake Charles Refinery. Id.2
        After these corporate transfers, Oxy retained possession of Butadiene Plancor 706 and
Citgo retained possession of the Lake Charles Refinery, which included rights under the Avgas
Contract and was the grantor of the ROW Agreement. See Pls.’ Cross Mot. at 8–9; Def.’s Mot.
at 8–10. According to Plaintiffs, Oxy also retained rights under the ROW Agreement as the
owner of Butadiene Plancor 706. Pls.’ Cross Mot. at 29–30. Oxy explains that “the
indemnification provided under the ROW Agreement, and the rights thereunder, initially inured
to CSC’s benefit as both (1) the owner of the Lake Charles Refinery (the property through which
CSC granted the easement), as well as (2) the operator/lessee of the Plancor 706 under the
Lease . . . which was eventually assigned to CSOGC (and later OXY USA).” Pls.’ Sur-Reply
at 4, ECF No. 66 (citing CFC-Appx123).
                4.      Intervening Environmental Contamination

       Cities Service’s production of avgas and butadiene caused significant waste at both the
Lake Charles Refinery and Butadiene Plancor 706, which had its waste transported to the Lake
Charles Refinery Surge Pond through the Effluent Disposal System constructed over the
butadiene plant’s right of way. Compl. ¶ 24.
        Avgas is a blend of ordinary gasoline, petroleum distillates, and chemical additives like
alkylate, a high-octane gasoline component produced using sulfuric acid. Shell Oil III, 751 F.3d
at 1288. One of the by-products of avgas production is spent alkylation acid, which is
reprocessed into sulfuric acid, used to produce other petroleum products, or discarded as waste.
Id. During the war, few facilities processed spent alkylation acid, and few railcars could be
diverted to allow for transportation of the spent alkylation acid for reprocessing. Id. Therefore,
many of the oil companies involved in avgas production dumped and burned their acid waste.
Id. Predictably, this resulted in extensive environmental destruction and litigation for cleanup
costs under both CERCLA and state law. Id. at 1288–89.
       Since the mid-century, Plaintiffs’ refining operations have been involved in regular
environmental contamination cleanup efforts. Operation of the refinery and plant, in part under

1
    The parties’ appendix materials are filed at ECF Nos. 46-2, 46-3, 49-2, 56-1, and 66-2.
2
  In 1983, Southland Corporation acquired all outstanding stock in what became Citgo through a
stock purchase agreement between Occidental, Cities Service Company, and Cities Service RMT
Corporation. Def.’s Mot. at 11 (citing CFC-Appx150–519). Per this agreement, Southland
Corporation (which appears to have later rebranded to 7-Eleven, Inc., the chain of retail
convenience stores) acquired all business “in Cities’ refining . . . operations . . . including, but
not limited to, the ownership, operation and/or maintenance of the Lake Charles Refinery.” Id.
(citing CFC-Appx164).
                                                 5
the war contracts and in part in the following years, “generated a wide range of hazardous
wastes,” including:
       (1) slop oil, oil emulsions, acid sludge, spent acids, separator sludge, tank
       bottoms, and other waste materials generated from the Refinery operations; and
       (2) oil emulsions, copper ammonium acetate, clarification sludge, boiler
       blowdown and lime slurry waste, acetylene polymer waste, spent sulfuric acid,
       spent caustic soda, and acetone waste generated at the Butadiene Plancor.
Compl. Ex. D at 10. Both Oxy and Citgo have “implemented a continuous, uninterrupted
program to address various areas of contamination at the Lake Charles Complex.” Id. They
attribute much of the waste to effluent discharge from Butadiene Plancor 706 at the Surge Pond
and from operations at the Lake Charles Refinery, or at the plant itself due to production. Id.
at 11. Both companies have also incurred orders under CERCLA, Louisiana state law, and state-
imposed environmental directives to undertake cleanup actions. Compl. ¶ 30. The Plaintiffs
allege that they have sustained approximately $94,000,000 in costs through December 2016,
“and will continue to incur substantial additional response costs for the foreseeable future.”
Id. ¶ 32. Cleanup at Lake Charles is ongoing.
       B.      Procedural Background

        On May 10, 2019, following denial of their certified demand to the GSA, Oxy and Citgo
jointly filed a Complaint against the United States. Compl. ¶ 33; see Compl. Ex. D. They assert
that the “United States is required to indemnify and reimburse Plaintiffs for their incurred
cleanup costs” at the Lake Charles Complex. Pls.’ Cross Mot. at 5, 6. Plaintiffs allege three
counts. Under the first two counts, the Oil Companies assert breach of contract claims under the
Contract Settlement Act of 1944 related to the United States’ refusal to pay or reimburse
Plaintiffs for cleanup costs under the Avgas Contract. Compl. ¶¶ 35–39, 40–47. In their third
count, Plaintiffs assert a breach of contract claim under the Contract Disputes Act related to the
United States’ refusal to reimburse costs under the ROW Agreement. Id. ¶¶ 50–56.3
        This is the Government’s second motion to dismiss Plaintiffs’ Complaint. See Def.’s
Mot. to Dismiss, ECF No. 9; Def.’s Amended Mot. to Dismiss, ECF No. 11. Judge Bruggink of
the Court of Federal Claims dismissed both the first motion and Plaintiffs’ first cross motion
without prejudice, ruling that further discovery on Plaintiffs’ rights under the contracts and
related to the asset transfers was required. See June 26, 2020 Order, ECF No. 26 (denying
motions without prejudice); June 24, 2020 Hr’g Tr. at 33:17–25 (Judge Bruggink ordering
further discovery on corporate history), 35–36 (denying motions without prejudice).
      Following Judge Bruggink’s Order, the parties undertook additional discovery. On
September 24, 2021, the Government again moved to dismiss, and Plaintiffs filed a Cross

3
  Plaintiffs’ Complaint also included two claims—Counts III and IV—related to production of
rubber under the Rubber Reserve Contract. See Compl. ¶¶ 41–49. Plaintiffs withdrew these
claims in the prior motion to dismiss briefing. See Pls.’ Resp to Def.’s Amended Mot. to
Dismiss at 1–2, ECF No. 15; Def.’s Mot. at 1 n.1.
                                                 6
Motion for Partial Summary Judgment as to the United States’ liability under both the avgas and
butadiene war contracts. See Def.’s Mot.; Pls.’ Cross Mot. On February 28, 2022, the case was
transferred to the undersigned. See Feb. 28, 2022 Order, ECF No. 59. Oral argument was held
on October 3, 2022. See Oct. 3, 2022 Hr’g Tr. at ECF No. 70.
II.    Legal Standards

       A.      Subject Matter Jurisdiction

        Subject matter jurisdiction is a threshold issue. Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 94–95 (1998); Rules of the United States Court of Federal Claims (“RCFC”)
12(h)(3). Jurisdiction over a suit against the federal government also “requires a clear statement
from the United States waiving sovereign immunity, together with a claim falling within the
terms of the waiver.” United States v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003)
(citations omitted).
        The Tucker Act is a basis for subject matter jurisdiction and contains such a waiver. Id.
Under the Tucker Act, the Court of Federal Claims has jurisdiction over “any claim against the
United States founded either upon the Constitution, or any Act of Congress or any regulation of
an executive department, or upon any express or implied contract with the United States, or for
liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). But
because the Tucker Act only waives sovereign immunity and does not itself create substantive
rights, a plaintiff must also identify a separate source of law that can be fairly interpreted as
creating a right to money damages. Rick’s Mushroom Serv., Inc. v. United States, 521 F.3d
1338, 1343 (Fed. Cir. 2008) (citing United States v. Mitchell, 463 U.S. 206, 216 (1983)). An
allegation of a contract and breach of that contract can act as a right to money damages when
monetary relief is sought. See Ransom v. United States, 900 F.2d 242, 244 (Fed. Cir. 1990).
       B.      Standards of Review

         The Government filed a motion to dismiss under RCFC 12(b)(1) and 12(b)(6). See Def.’s
Mot. The burden of proving jurisdiction in a motion to dismiss under RCFC 12(b)(1) typically
lies with the plaintiff seeking to invoke the court’s jurisdiction. McNutt v. Gen. Motors
Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936); Alder Terrace, Inc. v. United States,
161 F.3d 1372, 1377 (Fed. Cir. 1998). When a party challenges the truth of the jurisdictional
facts alleged in the complaint, the court determines whether the plaintiff has established
jurisdiction by a preponderance of the evidence. Reynolds v. Army & Air Force Exch. Serv.,
846 F.2d 746, 748 (Fed. Cir. 1988). Additionally, the court may “inquire into jurisdictional
facts” outside of the pleadings to determine whether it has jurisdiction. Rocovich v. United
States, 933 F.2d 991, 993 (Fed. Cir. 1991).
        For a motion to dismiss under RCFC 12(b)(6), the Court evaluates whether the complaint
“contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see Am. Bankers Ass’n v. United
States, 832 F.3d 1375, 1380 (Fed. Cir. 2019). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
                                                  7
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. When reviewing the complaint, “the
court must accept as true the complaint’s undisputed factual allegations and should construe
them in a light most favorable to the plaintiff.” Cambridge v. United States, 558 F.3d 1331,
1335 (Fed. Cir. 2009) (citing Papasan v. Allain, 478 U.S. 265, 283 (1986)).
         Finally, Plaintiffs filed a cross motion for summary judgment under RCFC 65(a).
“Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.’” E.g., Alamanza v.
United States, 935 F.3d 1332, 1336–37 (Fed. Cir. 2019) (citing FastShip, LLC v. United States,
892 F.3d 1298, 1302 (Fed. Cir. 2018)); see also RCFC 56(a). A fact is material if it “might
affect the outcome of the suit under the governing law,” and a dispute over such a fact is genuine
“if the evidence is such that a reasonable [fact finder] could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant bears the
burden of demonstrating the absence of a genuine dispute of material fact and must establish its
position by “citing to particular parts of materials in the record.” RCFC 56(c)(1)(A). All
justifiable inferences are drawn in the non-movants favor, Alamanza, 935 F.3d at 1336, and “any
doubt over factual issues will be resolved in favor of the non-moving party.” Jaster v. United
States, 86 Fed. Cl. 731, 733 (2009) (citing Mingus Contractors, Inc. v. United States, 812
F.2d 1387, 1390 (Fed. Cir. 1987)).
III.   Discussion

       A.      Subject Matter Jurisdiction Under the Anti-Assignment Act

        The Government first moves to dismiss the Complaint because Plaintiffs failed to
establish jurisdiction in light of the Anti-Assignment Act’s bar on assigning government
contracts, as “neither plaintiff was a contracting party.” Def.’s Mot. at 14. Indeed, the original
contracts—the Avgas Contract, Rubber Reserve Contract, and ROW Agreement—were signed
by the federal government and Cities Service, not the plaintiff Oil Companies.
        Generally, courts treat Anti-Assignment Act disputes under the typical Rule 12(b)(1)
motion to dismiss framework. See, e.g., DDS Holdings, Inc. v. United States, 158 Fed. Cl. 431,
436, 439 (2022); L-3 Commc’ns Sys., LP v. United States, 84 Fed. Cl. 768, 775–76 (2008);
Johnson Controls World Servs. v. United States, 44 Fed. Cl. 334, 340 (1999). Under this
framework, the Court reviews “evidence extrinsic to the pleadings” to analyze whether the
plaintiff has proven jurisdiction by proving an exception to the Anti-Assignment Act. DDS
Holdings, 158 Fed. Cl. at 436, 439 (citing Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573,
1584 (Fed. Cir. 1993) (granting the defendant’s motion to dismiss for lack of subject matter
jurisdiction because “plaintiff demonstrated neither outright privity of contract with the
government nor a valid assignment of any claims that would constitute the necessary privity.”)).
        However, the Court of Federal Claims has occasionally held that, “[f]or the purposes of
jurisdiction, a plaintiff need merely show that a contract with the government underlies the
claim.” Liberty Ammunition, Inc. v. United States, 101 Fed. Cl. 581, 586–87 (2011); see also
Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997) (“A well-pleaded

                                                 8
allegation in the complaint is sufficient to overcome challenges to jurisdiction.”). This position
is supported by the Federal Circuit, which “has unambiguously held that ‘jurisdiction under the
Tucker Act requires no more than a non-frivolous allegation of a contract with the government.’”
Liberty Ammunition, 101 Fed. Cl. at 586–87 (emphasis removed) (quoting Engage Learning Inc.
v. Salazar, 660 F.3d 1346, 1353 (Fed. Cir. 2011)). Consequently, when analyzing a Rule
12(b)(1) motion to dismiss based on the Anti-Assignment Act, the court in Liberty Ammunition
held that “[t]he actual existence of a contract is not a jurisdictional matter but rather a decision
on the merits of the case.” Id. (citing Engage Learning, 660 F.3d at 1354–55). Under this
formulation, Plaintiffs’ claims would survive dismissal because both parties recognize that a
contract with the government occurred.
        But while the Federal Circuit has not clearly categorized Anti-Assignment Act violations
as a jurisdictional bar, it has discussed the Act’s impact on the waiver of sovereign immunity and
privity of contract. “[T]here must be privity of contract between the plaintiff and the United
States.” Cienega Gardens v. United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998), cert. denied,
sub nom., Sherman Park Apartments v. United States, 528 U.S. 820 (1999). “The effect of
finding privity of contract between a party and the United States is to find a waiver of sovereign
immunity,” which implicates a plaintiff’s standing. Id.; see also Erickson Air Crane Co. v.
United States, 731 F.2d 810, 813 (Fed. Cir. 1984) (“The government consents to be sued only by
those with whom it has privity of contract.”); S. Cal. Fed. Sav. & Loan Ass’n v. United States,
422 F.3d 1319, 1328 n.3 (Fed. Cir. 2005), cert. denied, sub nom., Martin v. United States,
548 U.S. 904 (2006) (“[S]tanding and privity of contract with the government are questions of
subject matter jurisdiction.”).
       Furthermore, the Federal Circuit has clarified that “the Tucker Act must be read to waive
sovereign immunity for assignees . . . except as barred by a statutory provision such as the Anti-
Assignment Act.” Ins. Co. of the W. v. United States, 243 F.3d 1367, 1375 (Fed. Cir. 2001). It
follows that if the Anti-Assignment Act bars the sovereign immunity waiver provided by the
Tucker Act, there is no privity of contract with the government, and no jurisdiction under the
Tucker Act. See First Annapolis Bancorp, Inc. v. United States, 644 F.3d 1367, 1373
(Fed. Cir. 2011) (“The lack of privity impacts the lack of waiver of sovereign immunity, which is
available pursuant to the Tucker Act.”); Katz v. Cisneros, 16 F.3d 1204, 1210 (Fed. Cir. 1994)
(“Absent privity between [plaintiff] and the government, there is no case.”).
        Notably, the Federal Circuit has corrected trial courts for dismissing contractual claims
on jurisdictional grounds in cases not involving the Anti-Assignment Act. See Brach v. United
States, 443 F. App’x 543, 547 (Fed. Cir. 2011). But it has not done so when the Anti-
Assignment Act is implicated. See Steppe v. United States, 945 F.2d 416, at *1 (Fed. Cir. 1991)
(unpublished) (agreeing with the lower court that the Anti-Assignment Act robbed the appellant
of standing); see also Wall Indus., Inc. v. United States, 10 Cl. Ct. 82, 86 (1986) (noting that “the
only issue remaining in controversy is that of jurisdiction (§§ 7422 and 6511 of 26 U.S.C. and
the Anti-Assignment Act, 31 U.S.C. § 3727)”). Therefore, the Anti-Assignment Act stands to
bar this Court’s jurisdiction. Accordingly, Plaintiffs cannot merely assert the existence of a

                                                  9
government contract to establish jurisdiction; each Plaintiff must prove their assignments’
validity by a preponderance of the evidence. See Reynolds, 846 F.2d at 748.
               1.      The Anti-Assignment Act’s Jurisdictional Bar

        The Anti-Assignment Act consists of two statutory acts, 31 U.S.C. § 3727 and
41 U.S.C. § 15, that “invalidate assignments of government contracts unless specific conditions
are met.” Ham Invs., LLC v. United States, 388 F. App’x 958, 960 (Fed. Cir. 2010); see Tuftco
Corp. v. United States, 614 F.2d 740, 744 n.4 (Ct. Cl. 1980) (describing differences between
each statute). Section 3727 of Title 31 prohibits the assignment of claims, whereas Section 15(a)
of Title 41 prohibits the assignment of contracts. See L-3 Commc’ns, 84 Fed. Cl. at 776 (citing
Delmarva Power & Light Co. v. United States, 542 F.3d 889, 892 (Fed. Cir. 2008)). The statutes
define assignment as “a transfer or assignment of any part of a claim against the United States
Government or of an interest in the claim.” 31 U.S.C. § 3727(a)(1). Under the Act, “[t]he party
to whom the Federal Government gives a contract or order may not transfer the contract or order,
or any interest in the contract or order, to another party.” 41 U.S.C. § 6305(a). Any transfer
made against this prohibition “annuls the contract or order so far as the Federal Government is
concerned.” Id.
        The statutes have two broad policy rationales. First, the Act aims to prevent individuals
from buying up claims against the United States to influence government officers. Tuftco Corp.,
614 F.2d at 744 (quoting Spofford v. Kirk, 97 U.S. 484, 490 (1878)). Second, “it is inferred
[that] Congress sought to enable the United States to deal exclusively with the original claimant
instead of several parties,” which helps avoid confusion related to multiple areas of liability. Id.
(quoting Patterson v. United States, 354 F.2d 327, 329 (1965)) (internal quotation marks
omitted). Both of these goals share the common theme of preventing the United States from
suffering injury. L-3 Commc’ns, 84 Fed. Cl. at 777 (citing Seaboard Air Line Ry. v. United
States, 256 U.S. 655, 657 (1921)). Accordingly, “the Act does not restrict assignments where
there is no probability that the United States could suffer injury.” Id. at 778.
                       a. Consent Exception

        While the Anti-Assignment Act was originally read to invalidate all assignments,
multiple exceptions are now well-recognized. See Tuftco Corp., 614 F.2d at 745 (collecting
cases). Here, the parties disagree whether these exceptions prevent the Avgas Contract and
ROW Agreement assignments from Cities Service to Oxy and Citgo in their present forms.
“[T]he Government, if it chooses to do so, may recognize an assignment.” Id. (citing Maffia v.
United States, 143 Ct. Cl. 198, 203 (1958)); see also Christian & Assoc. v. United States,
160 Ct. Cl. 1, 10, cert denied, 375 U.S. 954 (1963)). The Act is “interpreted as being solely for
the Government’s own benefit and therefore as permitting the Government to assent to and
recognize an assignment where it seems appropriate.” Christian & Assoc., 160 Ct. Cl. at 10
(collecting cases).

                                                 10
                       b. The Operation of Law Exception

        The Act will also not restrict assignments when the assignment occurs “by operation of
law.” Tuftco Corp., 614 F.2d at 745. This exception to the Anti-Assignment Act occurs “when
transfer of a claim or contract is effected by consolidation or merger to the successor of a
claimant corporation.” Id. (quoting Seaborn Air Line Ry., 256 U.S. 655); see also Liberty
Ammunition, 101 Fed. Cl. at 589. It “generally involves situations where, for all intents and
purposes, the contract with the Government continues with essentially the same entity, which has
undergone a change in its corporate form or ownership.” L-3 Commc’ns, 84 Fed. Cl. at 777
(citing Westinghouse Elec. Co. v. United States, 56 Fed. Cl. 564, 569 (2003), aff’d, 97 F. App’x
931 (Fed. Cir. 2004)). This exception also permits assignments “[w]here a transfer is incident to
the sale of an entire business or the sale of an entire portion of a business.” Id. (citing Lyons Sec.
Serv. Inc. v. United States, 38 Fed. Cl. 783, 786 (1997)). Some courts have described this as an
“in toto” acquisition of the entirety of a business or business unit. See id. at 771. However, full
sale of a business is not required, and the Court of Federal Claims has upheld assignments under
the operation of law exception when “substantially all of the company’s assets and liabilities
were transferred.” Lyons Sec. Serv., 38 Fed. Cl. at 785.
        The parties largely agree on the extensive background of corporate transactions and
changes that resulted in Cities Service Refining Corporation’s transition into Cities Service
Company, a wholly-owned subsidiary of Occidental Petroleum. See Def.’s Mot. at 8–13; Pls.’
Cross Mot. at 8–20. However, the parties disagree on the 1982–83 assignments that divided
Cities Service Company between Cities Service RMT Corporation (later Citgo) and Cities
Service Oil and Gas Corporation (later Oxy).
        The Government argues that the 1982–83 assignments at issue were voluntary “asset
transfers” where the “purported successor had acquired ‘only a portion of the . . . business that
had, in the past, performed certain services under the . . . contract.’” Def.’s Mot. at 14, 16, 18
(citing Westinghouse Elec., 56 Fed. Cl. at 569, 570 (holding that a corporate sale did not
constitute a permitted assignment because the “entire [corporate] entity responsible for the
[government contract] was not sold”)). The Government further contends that “[Cities Service]
had attempted to assign all of its contractual rights associated with the Lake Charles refinery . . .
and only some of its burdens under those contracts, to an entity which ultimately became
CITGO.” Id. at 16. Similarly, it claims that “CSC unilaterally split contractual obligations
between itself and CSOGC (later renamed OXY) and CSRMT (renamed CITGO), assigning only
some obligations to the new entities.” Id.
        Defendant also highlights that “rather than identify the entity the plaintiffs consider the
successor of the contracting party . . . they bring the claim on behalf of both OXY and CITGO,
which suggests that plaintiffs are unsure whether the contracts here were part of an asset transfer
to CITGO.” Id. at 17. It further questions how the assignments remained valid after the 1955
sale of Butadiene Plancor 706 to the PCI joint venture, noting that the ROW Agreement is a
servitude that “runs with the land” and transferred to PCI as the new owner. Id. at 2, 12.

                                                 11
        Plaintiffs contest the Government’s characterization of the assignments. As for Citgo, the
Oil Companies argue that it was transferred ownership of the Lake Charles Refinery as “part of a
transfer of an entire portion of a business.” Pls.’ Cross Mot. at 11 (citing L-3 Commc’ns,
84 Fed. Cl. at 777). They point to the agreement signed between Cities Service Company and
Cities Service RMT Corporation that “transferred all of CSC’s Petroleum Products Group to
CSRMT,” which was a wholly-owned subsidiary. Pls.’ Cross Mot. at 12 (citing
CFC-Appx130–31, 797, 800). Such an assignment is akin to a “transfer of an entire portion of a
business” because Cities Service Company “reorganized [and] transferr[ed] an entire division to
CSRMT.” Pls.’ Cross Mot. at 14 (citing CFC-Appx797, 800). These rights to the Lake Charles
Refinery included the rights under the Avgas Contract and the ROW Agreement. The Oil
Companies also argue that these transfers did not harm the Act’s policy goals, as the transfers
occurred decades after performance ended and have not caused duplicative litigation. Pls.’ Cross
Mot. at 14–20.
         As for the Oxy assignment, the Oil Companies claim that Oxy was also granted
indemnification because of its ownership in Butadiene Plancor 706. They argue that “[u]nder the
ROW Agreement, the Government agreed to two fundamental obligations: (1) the Government
agreed to ‘assume and pay all damages’ resulting from the construction and operation of the
Butadiene Plant Effluent Disposal System, and (2) the Government agreed to indemnify
Plaintiffs for ‘losses, claims, demands and suits for damages to property and injury to or death of
persons, including court costs and attorneys’ fees, incident to or resulting from grantee’s exercise
of the rights herein granted.’” Id. at 29–30 (cleaned up) (citing Compl. Ex. C at 2); see also
id. at 20 (describing this as a right “to enforce Defendant’s indemnity obligations under the RoW
Agreement.”). According to Plaintiffs, the obligations authorize indemnification not only to
Citgo as the owner of the Lake Charles Refinery where the Surge Pond is located, but also to
Oxy as “operator/lessee” of the butadiene plant. Id. at 21. Moreover, Plaintiffs argue that the
assignment between Cities Service Company and Cities Service Oil and Gas Corporation
transferred “all assets of whatsoever kind of CSC,” which included Butadiene Plancor 706 and
“rights to enforce Defendant’s indemnity obligations under the ROW Agreement.” Id. at 20
(citing CFC-Appx123).
               2.      Assignment to Cities Services RMT Corporation (Citgo)

                       a. The Lake Charles Refinery Assignment to Cities Service RMT
                          Corporation (Citgo) Falls Under the Operation of Law Exception.

        Cities Service RMT Corporation was incorporated in 1983. CFC-Appx799–800
(declaration of Jeff Bednar). At the same time, Cities Service Company “separated its refining,
marketing, and transportation operations from its other assets and operations, by transferring
them to [CSRMT] pursuant to two Assignment and Assumption Agreements.” Id. The second
agreement, the Restated Assignment and Assumption Agreement, “grant[ed], convey[ed],
assign[ed], and deliver[ed]” to Cities Service RMT Corporation:

       all assets of whatsoever kind of the Company that are necessary for the operation
       of the Refining, Marketing and Transportation Division of its Petroleum Products
                                              12
       Group . . . including but not limited to . . . [a]ll of the assets included on the books
       and records of the Company as assets of the Petroleum Products Group.

CFC-Appx130 (Restated Assignment and Assumption Agreement). Other assets, such as
trademarks and employees, were also transferred. See CFC-App131–34 (Restated Assignment
and Assumption Agreement). As Plaintiffs explain, this transaction was “the consolidation and
reorganization of the CSC entity between its refining, marketing, and transportation operations
into one entity, and its upstream oil and gas operations into another entity, []the Cities Service
Oil and Gas Corporation.” June 24, 2020 Hr’g Tr. at 11:13–19.

        This assignment is not an in toto acquisition of the entirety of a business unit because
some assets outside the refining, marketing, and transportation divisions of Cities Service
Company’s Petroleum Products Group were ostensibly left to the parent firm.4 See L-3
Commc’ns, 84 Fed. Cl. at 777 (“Where a transfer is incident to the sale of an entire business or
the sale of an entire portion of a business, the transfer is considered to have occurred ‘by
operation of law.’”) (quoting Lyons Sec. Serv., 38 Fed. Cl. at 786); see also Johnson Controls,
44 Fed. Cl. at 336–37 (upholding transfer where all assets were transferred). Nevertheless, the
assignment was more akin to a “change in corporate identity” than a voluntary assignment in
violation of the Act. Johnson Controls, 44 Fed. Cl. at 343.

        Courts ask whether “for all intents and purposes, the contract with the Government
continues with essentially the same entity.” L-3 Commc’ns, 84 Fed. Cl. at 777. Here, the
reorganization between the parent and wholly-owned subsidiary ensured that the new entity
continued with the same key management, assets, and financial resources to perform the
government contract after the reorganization. See Johnson Controls, 44 Fed. Cl. at 344; see also
Am. Gov’t Props. v. United States, 118 Fed. Cl. 61, 68 (2014) (finding assignment to a new
entity with new management and different finances violated the Act). The assignment included
“all rights and benefits” under related contracts and “all employees required to operate and
service the assets and business activities being assigned and transferred,” as well as a
contribution of capital. CFC-Appx131. And while these assets did not include everything under
the business unit, “substantially all” of Cities Service refining business in the Petroleum Products
Group was transferred, with the same funding and management. Lyons Sec. Serv., 38 Fed. Cl.
at 785.5

4
  For this reason, Plaintiffs’ assertion that the agreement “transferred all of CSC’s Petroleum
Products Group to CSRMT” appears mistaken. Pls.’ Cross Mot. at 12 (citing CFC-Appx130–31,
797, 800).
5
  The Government stresses that the Restated Assignment and Assumption Agreement noted that
“it is the desire of the Company [i.e., CSC] to transfer certain assets to the Subsidiary as a
contribution of capital to the Subsidiary and to retain certain other assets in the Company.”
Def.’s Reply at 6–7 (emphasis omitted) (citing CFC-Appx123). But the “desire” of the company
to transfer does not necessitate that the transfer was voluntary.
                                                   13
        This finding also conforms with the Act’s policy goals, which courts use as a stand-in for
analysis. See, e.g., Johnson Controls, 44 Fed. Cl. at 344 (highlighting the significance of the
Act’s policy goals and determining “[t]he Air Force was never subject to multiple or duplicative
obligations and was always cognizant of the contracting party”); L-3 Commc’ns, 84 Fed. Cl.
at 777 (“In the instant case, the sale . . . is precisely the type of corporate transfer which is not
deleterious to the Government’s interest. The claim was passed to a single successor-in-
interest.”); Am. Gov’t Props., 118 Fed. Cl. 61, 68 (“The fact that the government is now sued by
both entities is the best proof that the attempted assignment was problematic.”).

          The Act aims to prevent the United States from suffering duplicative litigation or
multiple claims for liability, and otherwise “does not restrict assignments where there is no
probability that the United States could suffer injury.” L-3 Commc’ns, 84 Fed. Cl. at 778 (citing
Seaboard Air Line Ry., 256 U.S. at 657); see also Johnson Controls., 44 Fed. Cl. at 344. At the
time of the assignment in 1982, performance under the Avgas Contract had long been completed.
Even if the assignment was for less than Cities Service Company’s entire refining business, there
is little chance that Citgo’s predecessor could interfere with contract performance.
         Another chief policy goal of the Act is to minimize the impact of multiple claims against
the United States. See Am. Gov’t Props., 118 Fed. Cl. at 68. The Government makes repeated
arguments that this policy is violated here because there are two Plaintiffs, and thus two claims
for liability. See Def.’s Mot. at 19; Def.’s Reply in Supp. of Renewed Mot. to Dismiss and Resp.
(“Def.’s Reply”) at 11, ECF No. 56. But only one of the Plaintiffs owned the Lake Charles
Refinery, which served as the conduit for both the Avgas Contract and as grantor of the ROW
Agreement for waste disposal at the Surge Pond. The Act aims to prevent multiple claims for
liability over the same claim, not the same set of facts. Here, separate reimbursement claims
exist under the Avgas Contract and ROW Agreement for Citgo.

        The Government further argues that the Restated Assignment and Assumption
Agreement “divided contractual liabilities and obligations between CSC and CSRMT.” Def.’s
Mot. at 10; see also Def.’s Reply at 9 (citing CFC-Appx133). It claims that split rights and
obligations are substantively different from those in L-3 Communications and Johnson Controls,
which did not feature any splitting of rights or obligations, nor any splitting of business groups.
But divided contractual rights would not challenge the finding that substantially all of the
Petroleum Products group was assigned. Nor does the Government identify any specific liability
at the Lake Charles Refinery that was split or impacted just because other liabilities or
obligations in the Restated Assignment and Assumption Agreement may have been divided. The
record supports the opposite: Through the Lake Charles Refinery, Cities Service RMT
Corporation was granted “[a]ll rights and benefits of the Company under contracts which relate
to the assts assigned,” as well as “[a]ll of the Company’s obligations under the contracts which

                                                 14
are assigned.” CFC-Appx131–33. This encompassed the Lake Charles Refinery, and in turn, the
Avgas Contract and ROW Agreement.6

        Overall, the Anti-Assignment Act’s primary inquiry “is whether one corporation is, in
fact, the successor-in-interest of the other. . . . [T]he successor corporation must retain the same
management and financial resources that its predecessor possessed.” United Int’l Investigative
Servs. v. United States, 26 Cl. Ct. 892, 898–99 (1992). “The retention of these resources
adequately ensures that the government continues to receive the benefit of the management and
financial responsibility for which it bargained.” Id. at 899. Here, the assignment could not
interfere with the government’s agreement because the contract had long-ago ended and a
surviving entity could still be held responsible. Cities Service no longer exists, but its ownership
of the Lake Charles Refinery continues under Citgo.7

        Accordingly, the Avgas Contract and ROW Agreement assignments to Citgo remain
valid under the Anti-Assignment Act, and the Government’s motion to dismiss these claims
based on lack of subject matter jurisdiction is denied.8
               3.      Assignment to Cities Service Oil and Gas Corporation (Oxy)

                       a. The Butadiene Plancor 706 Assignment to Oxy Does not Fall
                          Under the Operation of Law Exception.

       Cities Service Oil and Gas Corporation was formed in Delaware in 1982. CFC-Appx797
(Charles Purser Declaration). In 1983, “certain oil and gas assets of [Cities Service Company]

6
   For the same reason, the later acquisition of Citgo from Southland Corporation does not
change Citgo’s indemnification rights under either agreement or divide liability. The
Government describes a 1983 stock purchase agreement between Southland and Citgo. See
Def.’s Mot. at 11. However, it never argues that this agreement assigned the contracts at issue,
or otherwise demonstrates how this agreement implicates the Anti-Assignment Act. For
example, the Government claims the agreement “assigned to Southland ‘any and all businesses
. . . including . . . the Lake Charles Refinery.’” Id. at 11 (citing CFC-Appx164). But Southland
was not assigned the underlying contracts—it purchased the issued and outstanding capital stock
of Citgo. CFC-Appx162–64. Ownership of the corporate entity does not necessitate assignment
of the contract.
7
  Reinforcing that Citgo is the “successor-in-interest” of Cities Service, Citgo’s website contains
a corporate history that chronicles four decades of Cities Service history as part of its own
corporate origin story. See Our Heritage: The History of CITGO Through the Decades (last
visited October 20, 2022), https://www.citgo.com/about/our-history.
8
  Plaintiffs also argued that the government consented to the transfer of the ROW Agreement’s
indemnification rights to Citgo when it “prospectively consented to such assignments to
subsidiaries and affiliates in the Butadiene Lease Contract.” Pls.’ Cross Mot. at 9. This
argument is moot as to Citgo because its assignment is valid under the operation of law
exception to the Anti-Assignment Act.
                                                 15
were transferred to its subsidiary CSOGC” through an Assignment and Assumption Agreement.
Id.; see CFC-Appx123 (Assignment and Assumption Agreement). This agreement covered “all
assets of whatsoever kind” of Cities Service Company, “less and except” reserved assets: the
Petroleum Products Group, certain lands, and all assets in various business groups, including the
Company’s Gas Retail Section of the Natural Gas Liquids Division and the entire Metals
Division. CFC-Appx123–24 (Assignment and Assumption Agreement). The agreement does
not explicitly name what was transferred outside what was reserved, but it did include Butadiene
Plancor 706. See id.; Pls.’ Cross Mot. at 9. The many assets that remained at Cities Service
Company were then either transferred to Cities Service RMT Corporation during the 1983
assignment or retained in a re-branded Cities Service Company (Cities Offshore Production
Company), which later merged with Oxy in 1993. See CFC-Appx797.
        Unlike the transfer to the entity that became Citgo, the assignment of assets to Cities
Service Oil and Gas Corporation does not name an entity, business group, or business division
that could be characterized as an assignment “incident to the sale of an entire business or the sale
of an entire portion of a business,” or as substantially all of a business unit. L-3 Commc’ns,
84 Fed. Cl. at 777; see CFC-Appx123–26; see also Lyons Sec. Serv., 38 Fed. Cl. at 786. Rather,
the Assignment and Assumption Agreement is a full grant riddled with exceptions that reads like
a laundry list of corporate assets in transition, with no overarching theme or division. See
CFC-Appx123–26. The litany of exceptions does not provide a basis for an in toto acquisition of
a business unit, let alone a business group or smaller-defined subset. For Cities Service Oil and
Gas Corporation, everything but the assets later sent to Cities Service RMT Corporation or
otherwise retained in the parent were assigned. CFC-Appx123 (transferring “all assets of
whatsoever kind of the Company, LESS AND EXCEPT, however, and reserving unto the
Company” other assets).
       It is also unclear whether the same employees, management structures, or financial
controls were transferred to Cities Service Oil and Gas Corporation. See Am. Gov’t Prop.,
118 Fed. Cl at 68 (highlighting the importance of having the same business structure in terms of
employees and finances). The 1993 merger of Oxy and Cities Offshore Production Company—
which comprised the final remaining assets of Cities Service Company—further underscores that
the 1983 assignment was not “for all intents and purposes . . . essentially the same entity.” L-3
Commc’ns, 84 Fed. Cl. at 777.

        This transfer also fails under a policy-minded approach. First, the transfer poses no
serious risk to contract performance. See id., 84 Fed. Cl. at 777. By 1982, the government no
longer owned Butadiene Plancor 706, and like avgas, government-directed butadiene production
had ceased. But unlike the Avgas Contract, the ROW Agreement was designed for an ongoing
Effluent Disposal System to the Surge Pond, not production. Stated differently, as an easement
agreement and not a production contract, the end to butadiene production did not necessarily end
the risk of contract performance.

        The second policy implication—whether there are multiple litigants—is implicated here.
Plaintiffs try to dodge this concern by characterizing the ROW Agreement as containing “two

                                                16
fundamental obligations” from the government: (1) an agreement to “‘assume and pay all
damages’ resulting from the construction and operation of the Butadiene Plant Effluent Disposal
System”; and (2) an agreement “to indemnify Plaintiffs for ‘losses, claims, demands and suits for
damages to property and injury to or death of persons, including court costs and attorneys’ fees,
incident to or resulting from grantee’s exercise of the rights herein granted.’” Pls.’ Cross Mot.
at 29–30 (citing Compl., Ex. C at 2). According to Plaintiffs, the ROW Agreement’s indemnity
provision provides reimbursement to Citgo as the owner of the Lake Charles Refinery (where the
Surge Pond is located), and also to Oxy as “operator/lessee” of Butadiene Plancor 706 (the plant
responsible for waste at the Surge Pond). Id. at 21. Plaintiff’s argument is that while the Shell
Oil I decision triggered indemnification for “any new or additional charges,” the obligations
under the ROW Agreement more broadly covered any costs “incident to or resulting from” use
of the waste system. Id. at 30 (citing Compl. Ex. C at 2); see Shell Oil I, 751 F.3d at 1292.
Therefore, according to Plaintiffs, this broader language covers costs created at Butadiene
Plancor 706 after Cities Service bought the plant in 1955. Pls.’ Cross Mot. at 30.

        Plaintiffs’ reimbursement argument is unpersuasive for multiple reasons. Initially, the
indemnity provision does not “indemnify Plaintiffs,” as the Oil Companies claim. Id. at 29–30.
The provision stated: “[G]rantee also agrees to indemnify grantor for losses, claims, demands,
and suits for damages.” Compl. Ex. C at 2 (emphasis added). Oxy was neither grantee, nor
grantor. The grantee was “the owner of the Butadiene Plant,” Reconstruction Finance
Corporation, and the grantor was “the owner of the [Lake Charles] Refinery located adjacent to
the aforesaid Butadiene Plant,” Cities Service Refining Corporation. Id. at 1. As the later owner
of Butadiene Plancor 706, Oxy plays no role in a right held by the owner of the Lake Charles
Refinery.

       The ROW Agreement indemnity provision also states that:

       Grantee agrees to construct and maintain said pipeline in such condition that the
       escape of any products transported therein shall be prevented and should the
       property of grantor or any other corporation, person or firm be injured or destroyed
       thereby grantee agrees to assume and pay all damages resulting therefrom.

Id. at 2. Under a plain reading of this clause, the government agreed to “pay all damages
resulting” from the construction and maintenance of the waste disposal systems. It does not
imply carte blanche indemnification to a future owner of Butadiene Plancor 706—the plant that
caused the waste coming from the system.

        Further, Cities Service’s later purchase of Butadiene Plancor 706 put an end to any
reimbursement claim. On this point, the parties dispute whether the ROW Agreement was a
benefit or burden appurtenant that “passes automatically with the property interest” and relieved
the government of liability to perform, Def.’s Mot. at 23, or whether the right of way was a
burden in gross that does not discharge any liability, see Pls.’ Cross Mot. at 40–41. Neither
position is dispositive on Oxy’s rights under the ROW Agreement. Regardless of whether the
government’s obligations are benefits or burdens that would have survived a later sale, nothing
                                               17
under the indemnity provision obligates payment to the owner of Butadiene Plancor 706—the
grantee—let alone a future plant owner.

        Plaintiffs’ own Rule 30(b)(6) witness confirmed that, once the government sold
Butadiene Plancor 706, “[i]f the waste were not needed for the government’s operation of the
butadiene plant, of which it no longer had . . . it would not be responsible for” indemnifying
Cities Service under the ROW Agreement. CFC-Appx 538–39 (Purser 30(b)(6) deposition at
41:13–42:5). Thus, while the indemnity provision provides reimbursement for the grantor or
coverage for any liability relating to negligence in operation of the right-of-way pipeline,
Plaintiffs demonstrate no evidence to extend that indemnification to the future owner of the plant
(and future benefiter of the pipeline).

        Finally, Plaintiffs’ reading of the indemnity provision to grant a right to Oxy chafes with
the Anti-Assignment Act’s goal of preventing duplicative obligations. See Johnson Controls,
44 Fed. Cl. at 344; United States v. Shannon, 342 U.S. 288, 291 (1952). Plaintiffs each claim
indemnification from the same provision of the same government agreement, and Oxy seeks
indemnification even though it may no longer own Butadiene Plancor 706. See CFC-Appx577–
89 (Bednar 30(b)(6) deposition at 9:24–10:5); Def.’s Mot. at 9. Conceivably, the plant’s current
owner could also claim reimbursement for their incurred costs. This situation “is the very
possibility of multiple claimants that the Anti-Assignment Act is intended to prohibit.” Centers
v. United States, 71 Fed. Cl. 529, 535 (2006); see also Dominion Res., Inc. v. United States,
641 F.3d 1359, 1367 (Fed. Cir. 2011) (Gajarasa, J., concurring in part and dissenting in part)
(describing how a voluntary assignment “clearly implicates the mischief that the Claims Act was
intended to avoid: namely, forcing the United States to deal with multiple parties, including
strangers to the original transaction”).
                       b. The Government did not Consent to the Butadiene Plancor 706
                          Assignment to Oxy.

        Failing under the “operation of law” exception, Plaintiffs also argue that Oxy received a
valid assignment under the Anti-Assignment Act’s waiver exception when Cities Service
Company assigned the plant to Cities Service Oil and Gas Corporation.9 See Pls.’ Cross Mot.
at 9, 21–22; Maffia, 143 Ct. Cl. at 203 (“Despite the bar of the Anti-Assignment statute, the
Government, if it chooses to do so, may recognize an assignment.”); see also Tuftco Corp.,
614 F.2d at 745. The Oil Companies claim that the government prospectively “consented to this
partial assignment of the ROW Agreement’s indemnity” when it leased Butadiene Plancor 706 to
Cities Service. See Pls.’ Cross Mot. at 9, 21–22. They further explain that the government
signed a Butadiene Lease Agreement that included a provision authorizing Cities Service to

9
  Plaintiffs argue that the government consented to the transfer of the ROW Agreement as to
both Citgo and Oxy when Cities Service “prospectively consented to such assignments to
subsidiaries and affiliates in the Butadiene Lease Contract.” Pls.’ Cross Mot. at 9; see Pls.’
Cross Mot. at 9, 21. The majority of Plaintiffs’ argument applies to Citgo and is carried over to
Oxy. See id. at 21.
                                                 18
acquire “rights of way” and transfer or assign these rights under the Lease. Id. at 10 (citing
CFC-Appx45). This provision held:

       Lessee will not without prior written consent of Defense Corporation sell, assign,
       or pledge this agreement or any of its rights or obligations hereunder, except that
       Lessee may make such sale, assignment, or pledge to a subsidiary or affiliated
       company, provided that Lessee or the parent company of Lessee shall guarantee to
       Defense Corporation the full performance by such subsidiary or affiliated company
       of all Lessee’s duties and obligations hereunder and provided further that such
       subsidiary or affiliated company shall assume, without in any way releasing Lessee
       therefrom . . . all of Lessee’s duties and obligations hereunder.

CFC-Appx45.

        As the Oil Companies explain, the Butadiene Lease “expressly contemplated” a future
easement and “additional instruments of lease,” which “would have included the ROW
Agreement.” Pls.’ Cross Mot. at 10. But the Butadiene Lease also required “that Lessee . . .
shall guarantee to Defense Corporation the full performance” of any assignee. See
CFC-Appx45. Plaintiffs have submitted no evidence that Cities Service provided any guarantee
of performance for assignment of the ROW Agreement to Cities Service Oil and Gas
Corporation. Regardless of whether the Agreement’s indemnity provision actually provides a
right to relief for Oxy, the record does not demonstrate that the government gave consent other
than the conditional consent contemplated in the Butadiene Lease.

        The plain language of the Lease also requires the lessee to provide “prior written
consent,” CFC-Appx45 (emphasis added), which contrasts with Plaintiffs’ contention that the
guarantee requirement was “self-executing.” See Pls.’ Sur-Reply at 3–4. This claim by the Oil
Companies would have more weight if the assignment had not occurred more than three decades
after the government sold its ownership of the plant, with no evidence the government was
notified. See Ins. Co. of the W., 100 Fed. Cl. at 72 (“What will determine the legitimacy of tacit
consent are the circumstances surrounding the silence, particularly if rights and privileges are
implicated. It is presumed that the innocent party will speak out or otherwise respond to a
possible infringement of a right or privilege.”) (citing Georgia v. South Carolina, 497 U.S. 376,
389 (1990)); id. at 73 (“It is not incumbent upon the government to reserve the protections of the
Anti-Assignment Acts. Rather, the Anti-Assignment Acts protect the government unless they
are clearly waived, and silence can amount to waiver only when an ‘all the circumstances’
review indicates such a waiver.”) (citations omitted).
                       c. Oxy is not Subrogated into Citgo’s Position Under the Right of
                          Way Agreement.

        Finally, the Oil Companies argue that even if Oxy was never assigned rights under the
ROW Agreement, “it may nonetheless be subrogated unto CITGO’s position for making
payments for which CITGO could have sought contractual indemnification from Defendant.”
Pls.’ Cross Mot. at 22. Plaintiffs are correct that subrogation may apply where a party pays for
                                                  19
another’s obligations and that subrogation falls within the operation of law exception to the Anti-
Assignment Act. See id. at 22–23; Anchor Sav. Bank, FSB v. United States, 121 Fed. Cl. 296,
326 (2015) (“Transfers by operation of law include transfers by . . . subrogation.”) (quoting
Holland v. United States, 62 Fed. Cl. 395, 400 (2004)).
       The Federal Circuit recognizes that a plaintiff may be subrogated to an original
claimant’s claim when “the surety takes over contract performance or when it finances
completion of the defaulted contract.” Ins. Co. of the W., 243 F.3d at 1370; see also Prairie
State Nat’l Bank v. United States, 164 U.S. 277 (1896) (upholding equitable subrogation for
completing performance of a government contract under a performance bond). But Oxy has not
taken over Citgo’s position under either the Avgas Contract or ROW Agreement, nor has it
financed the completion of either contract.
        Plaintiffs point to First National City Bank, which held that subrogation applies when “a
party not acting voluntarily, but under some compulsion pays a debt or discharges an obligation
for which another is primarily liable and which in equity and good conscience ought to be
discharged by the latter.” Pls.’ Cross Mot. at 22–23 (citing First Nat’l City Bank v. United
States, 212 Ct. Cl. 357, 369 (1977)). However, First National City Bank also required that
“payment of the debt . . . result from some compulsion.” First Nat’l City Bank, 212 Ct. Cl.
at 369. Yet, aside from repeated assertions that Plaintiffs were required to pay for damages
assessed by the State of Louisiana, the Oil Companies fail to explain why Oxy specifically was
compelled to pay for costs that did not fall under its purview. Oxy also did not “take[] over
contract performance” or “finance[] completion of the defaulted contract.” Ins. Co. of the W.,
243 F.3d at 1370. Any obligation imposed on Citgo for environmental cleanup stemmed not
from the government’s required contractual performance, but from conduct related to a contract
with the government.
        Accordingly, because the assignment of Butadiene Plancor 706 did not to pass to Oxy by
any valid exception to the Anti-Assignment Act—operation of law, consent, or subrogation—the
assignment was made against the Anti-Assignment Act prohibition. The Act therefore “annuls
the contract . . . so far as the Federal Government is concerned.” 41 U.S.C. § 6305(a). Any
rights under the ROW Agreement identified in Plaintiffs’ final count are dismissed as to Oxy,
and Oxy is dismissed as a plaintiff.
       B.      Claims and Liability Under the Avgas Contract and Right of Way
               Agreement

        The Government next moves to dismiss Plaintiffs’ claims under the Avgas Contract and
ROW Agreement because Cities Service released the United States from liability under
subsequent settlements or mutual release agreements. See Def.’s Mot. at 19–21. Plaintiffs cross-
move for partial summary judgment as to the government’s liability on three counts related to the
Avgas Contract and ROW Agreement. In Counts I and II, Plaintiffs assert a breach of contract
claim and compensation for costs incurred under the Avgas Contract. Compl. ¶¶ 35–47. Under
Plaintiffs’ final count, the Oil Companies assert a breach of contract claim to recover costs
incurred under the ROW Agreement.

                                                20
               1.      The Avgas Contract

       Under the Avgas Contract, the United States must pay:
       any new or additional taxes, fees, or charges, other than income, excess profits, or
       corporate franchise taxes, which Seller may be required by any municipal, state, or
       federal law in the United States or any foreign country to collect or pay by reason
       of the production, manufacture, sale or delivery of the commodities delivered
       hereunder.
Compl. Ex. A at 11, ECF No. 1-3 (Avgas Contract).
        Plaintiffs argue that this provision is materially identical to an avgas contract granting
indemnification in Shell Oil I. See Pls.’ Cross Mot. at 24 (citing 751 F.3d at 1285). In that case,
Shell’s avgas contract contained indemnification for “any new or additional taxes, fees, or
charges . . . which Seller may be required by any municipal, state, or federal law . . . to collect or
pay.” Shell Oil I, 781 F.3d at 1285. The Federal Circuit held that the contract “require[d] the
Government to reimburse the Oil Companies for their CERCLA ‘charges’” and entitled them to
summary judgment as to contractual liability. Id. at 1285, 1302.
        The Government does not dispute the language of the Avgas Contract nor distinguish
Shell Oil I. Rather, it argues that the United States is no longer required to indemnify Citgo
because both parties “agreed to a ‘final and complete settlement of all claims . . . by reason of
termination of the [avgas] contract.” Def.’s Mot. at 19 (citing CFC-Appx4). This Court
recognizes “final and complete” settlement agreements when the settlement is “necessarily future
oriented,” and the Government asserts that this condition is satisfied here. Chevron USA v.
United States, 155 Fed. Cl. 344, 352–53 (2021) (quoting Augustine Med., Inc. v. Progressive
Dynamics, Inc., 194 F.3d 1367, 1371 (Fed. Cir. 1999)); see also Ford Motor Co. v. United
States, 378 F.3d 1314, 1322 (2004) (Schall, J., dissenting); see Def.’s Mot. at 20.
                       a. The Avgas Contract’s Indemnification Provision Covers CERCLA
                          Costs.

        Generally, “courts have held that indemnification provisions entered into between private
parties prior to the passage of CERCLA may cover costs assessed pursuant to that statute.” Ford
Motor, 378 F.3d at 1321 (Schall, J., dissenting) (collecting cases); see also, e.g., Dent v. Beazer
Materials & Servs., Inc., 156 F.3d 523, 534 (4th Cir. 1993); Beazer E., Inc. v. Mead Corp.,
34 F.3d 206, 211 (3d Cir. 1994), cert. denied, 514 U.S. 1065 (1995). To cover CERCLA costs,
multiple circuits hold that indemnification language “must either be ‘specific enough to include
CERCLA liability or general enough to include any and all environmental liability.’” Ford
Motor, 378 F.3d at 1321 (quoting Beazer, E., 34 F.3d at 211) (dissent collecting cases and
describing standard); DuPont, 365 F.3d at 1373; see also Shell Oil Co. v. United States,
108 Fed. Cl. 422, 433 (2013). “The key is whether the indemnity contains limiting language, or
whether it demonstrates an intent to allocate all possible liabilities among the parties. If there is
limiting language in the indemnity, without a specific provision for CERCLA costs, it does not
encompass them.” Ford Motor, 378 F.3d. at 1321 (citations omitted). In Ford Motor, the
                                                  21
Federal Circuit held that an indemnity provision between Ford and the Government “explicitly
refer[red] to unknown costs” and “include[d] all claims ‘not now known,’” ultimately concluding
that later CERCLA claims were reimbursable. Id. at 1319–20.
         Other cases follow a similar track. In DuPont, the Federal Circuit reviewed an
indemnification clause in another WWII-era contract that resulted in significant environmental
liability. 365 F.3d at 1369. This indemnification clause agreed “to hold [DuPont] harmless
against any loss, expense (including expense of litigation), or damage . . . of any kind
whatsoever” as long as it was connected to work under the contract. Id. at 1372. The Circuit
held that the indemnity language was sufficiently broad to include CERCLA liability.
         Though the language of the Avgas Contract is not “specific enough to include CERCLA
liability,” it is likely “general enough to include any and all environmental liability.” Id. at 1373.
As stated above, “the key is whether the indemnity contains limiting language.” Ford Motor,
378 F.3d at 1321. Here, the indemnification provision lists a wide category of costs (“additional
taxes, fees, or charges”) in various contexts (“which may be required by any municipal, state, or
federal law in the United States or foreign country”). See Compl. Ex. A at 11. Nevertheless, the
Federal Circuit has cautioned that CERCLA liability is compelled only when the “limitless
language was sufficiently broad.” Ford Motor, 378 F.3d at 1323 (dissent describing standard);
see also Shell Oil I, 751 F.3d at 1303–06.
         Shell Oil I clarifies that “any new or additional taxes, fees, or charges” in the Avgas
Contract is broad enough to include CERCLA costs. 751 F.3d at 1292–93. There, the Federal
Circuit held that “CERCLA is a federal law requiring responsible parties to pay the ‘costs of
removal or remedial action,’ and is thus a charge (i.e., cost) imposed by federal law. The plain
language of the new or additional charges provision thus requires the Government to indemnify.”
Id. (citations omitted). A different interpretation of the Avgas Contract might question
construing “a straightforward ‘Taxes’ clause into a catch-all indemnification provision.” Id. at
1306 (Reyna, J., dissenting). But this argument has been made and lost. Id.
       Under Shell Oil I:
       The Oil Companies agreed to the avgas contacts’ low profits in return for the
       Government’s assumption of certain risks outside of the Oil Companies’ control.
       The CERCLA charges in this case are one such risk. . . . These circumstances
       confirm that the new or additional charges provision must be interpreted to require
       reimbursement for the Oil Companies’ CERCLA costs arising from avgas
       production.
Id. at 1296. Because the instant case includes a near-identical indemnification provision in a
near-identical contract for avgas production of , the same finding of liability applies.
                       b. The Final Avgas Settlement did not Release All of Citgo’s
                          Contractual Claims.

      Next, the Government asserts that a 1947 settlement agreement and mutual release (the
“Avgas Settlement”) between Cities Service and the United States—which was termed a “final
                                             22
and complete settlement”—releases the government from all liability. Def.’s Mot. at 20. In
contrast, Plaintiffs argue that the settlement agreement was “limited in scope and solely related
to a wind-down of the war effort.” Pls.’ Cross Mot. at 24. They explain that the Avgas Contract
was meant to last until 1947, but that on the day following the Japanese surrender and cessation
of hostilities in August 1945, the United States notified Cities Service that it was terminating the
contract. Id. at 24–25. This early termination was a contractual breach. Id. In line with this
backstory, Plaintiffs contend that the Avgas Settlement only related to settling the breach of
contract, not all future claims. See id. at 28. In defense of this argument, they rely on several
examples—the Avgas Contract’s recital clauses, the contract’s alleged failure to comply with the
Contract Settlement Act of 1944, and the lack of prospective language in the Avgas Settlement.
Id.
         The Supreme Court has held that “[i]f the parties intend to leave some things open and
unsettled” in a mutual release, “their intent to do so should be made manifest.” see United States
v. William Cramp & Sons Ship & Engine Bldg. Co., 206 U.S. 118, 128 (1907). To ascertain this
intent, the Federal Circuit instructs courts to consider whether a mutual release or settlement
agreement uses broad, general language to settle claims. Augustine Med., 194 F.3d at 1372
(citing William Cramp, 206 U.S. at 128). If so, that broad language “constitute[s] a waiver of all
claims and causes of action ‘arising under or by virtue of the contract’ and of all ‘claims based
upon events occurring prior to the date of the release.’” Id. (cleaned up) (first citing William
Cramp, 206 U.S. at 128; and then Johnson, Drake & Piper, Inc. v. United States, 209 Ct. Cl.
313, 315 (1976)). These releases extend only to “all present, but not future claims.” Chevron,
155 Fed. Cl. at 352; see also Augustine Med., 194 F.3d at 1373.
        To release liability based on events occurring after the date of the general release, this
Court requires that the release “either expressly refer to future claims or include language that
indicates prospective application.” Chevron, 155 Fed. Cl. at 352 (citing Augustine Med., 194
F.3d at 1371). The latter requires language that is “necessarily future-oriented” such that “it
implies a future possibility of [the plaintiff] having a claim.” Augustine Med., 194 F.3d at 1371.
        For example, the Ford Motor case involved a similar claim from a manufacturer under a
WWII contract seeking later indemnification for CERCLA costs. See 378 F.3d at 1314. There,
the car manufacturer settled with the United States but left open certain “costs reimbursable
under the Contract . . . but which are not now known [to Ford].” Id. at 1318. The Ford Motor
court concluded that the “not now known” language did not bar later-imposed CERCLA
reimbursement costs “merely because the originating events are long past, for the liability for
cleanup did not arise until after the enactment of CERCLA and other environmental laws, and
the claim was timely made after it arose.” Id. at 1319–20. The “not now known” language
provided “no temporal limit as to when the claims would become known,” and thus expressly
preserved the right to indemnification in the future. Id. at 1319; see also Augustine Med., 194
F.3d at 1370–71 (holding that a general release of “any and all manner of action or actions” was
a prospective release that barred future claims); Chevron, 155 Fed. Cl. at 352 (following
Augustine Medical to hold that future environmental claims were not released).

                                                23
        The Government compares the Avgas Settlement here to Ford Motor as a basis for
barring indemnification. See Def.’s Mot. at 20. “Contract interpretation begins with the plain
language of the agreement.” Gould, Inc. v. United States, 925 F.2d 1271, 1274 (Fed. Cir. 1991);
see also Craft Mach. Works, Inc. v. United States, 926 F.2d 1110, 1113 (Fed. Cir. 1991) (“[T]he
plain and unambiguous meaning of a written agreement controls.”). “If a contract term is clear
and unambiguous, the Court will adopt its plain and ordinary meaning.” Tecom, Inc. v. United
States, 66 Fed. Cl. 736, 748 (2005) (collecting cases).

        The Avgas Settlement was signed in 1947—decades before CERCLA was passed and
before the environmental liability accrued. The mutual settlement includes recitals that outline
the start and end dates of the Avgas Contract. CFC-Appx2–4. Next, it provides that RCF will
compensate Cities Service for their lost investment and includes promises related to other costs.
Id. It ends by stating:
       This agreement shall not affect the claims of Cities Service to RFC in connection
       with expenses of settling the sub-contract claim of Warren Petroleum Co. and
       Southern Minerals Company. With these exceptions, this agreement constitutes
       final and complete settlement of all claims of Cities Service by reason of
       termination of the contract of June 16, 1942, as amended.
CFC-Appx4 (emphasis added).
        The Avgas Settlement delineates exceptions to which claims are reserved, which evinces
some intent to settle remaining claims. See id. Nonetheless, it limits “final and complete
settlement of all claims” to those “by reason of termination of the [Avgas] contract of June 16,
1942.” Id. This comports with the Oil Companies’ understanding that the release was limited
only to settling the early breach of contract in 1945. See Pls.’ Cross Mot. at 28. Rather than
release all claims, the mutual release in the Avgas Settlement was limited to the breach of
contract stemming from the government’s early termination. Though the final settlement may
sound “necessarily future-oriented,” it does not apply to all outstanding claims between the
parties. Indeed, the Avgas Settlement also contained the recital that “Cities Service has
presented to RFC on February 19, 1945 a claim for damages allegedly sustained by Cities
Service as a result of such termination.” Id. (citing CFC-Appx1).
        The Government attempts to read-in language from the Contract Settlement Act and
asserts that the Avgas Settlement must be read to cover “any other claim under a terminated war
contract.” Def.’s Reply at 17–18. But there is no evidence of this in the Avgas Settlement itself
or a need to look outside the agreement. Shell Oil I is again instructive. There, the Federal
Circuit reiterated that “[o]nce the facts of breach are established, the defendant has the burden of
pleading and proving any affirmative defense that legally excuses performance.” Shell Oil I, 751
F.3d at 1289 (quoting Stockton E. Water Dist. v. United States, 583 F.3d 1344, 1360
(Fed. Cir. 2009)). Further, the Contract Settlement Act “allows post-termination indemnification
claims, such as the Oil Companies’ claims on the terminated avgas contracts, so long as the
expenditure arose on account of the contractor’s performance under the contract, and the
expenditure is not otherwise excluded from payment by other provisions.” Id. (quoting Ford
Motor, 378 F.3d at 1320) (quotation marks omitted). Contract termination is not the same as a
                                                  24
general release, and the Government has not proven that the Avgas Settlement here covered
Citgo’s indemnification claims for CERCLA liability.
                      c. Citgo is Entitled to Relief and Partial Summary Judgment as to
                         the Government’s Liability Under the Avgas Contract.

        The Oil Companies have demonstrated that Citgo is entitled to indemnification under the
Avgas Contract, and that the Avgas Settlement only released claims for early termination of the
war contract—not all indemnification claims related to environmental liability. This establishes
a sufficient claim to relief, and the Government’s motion to dismiss the Avgas Contract claim
under RCFC 12(b)(6) is denied. Iqbal, 556 U.S. at 678.

         Additionally, Plaintiffs move for partial summary judgment as to “certain elements of
liability: (1) a finding that there were valid contracts between the parties, and (2) the
Government’s duties to Plaintiffs arising out of these contracts.” Pls.’ Sur-Reply at 29. On this
point, the Government argues that the timing is inappropriate for summary judgment because
additional discovery is needed. Def.’s Reply at 38–40. It correctly points out that, under Shell
Oil II, plaintiffs can only prevail in a breach of contract claim if they demonstrate “a valid
contract between the parties, a duty arising out of that contract, a breach of that duty, and
damages caused by the breach.” Chevron, 155 Fed. at Cl. 353 (citing Shell Oil Co. v. United
States, 130 Fed. Cl. 8, 34 (2017), aff’d, Shell Oil II, 896 F.3d 1299; see Def.’s Reply at 35. The
Government contends that none of these factors have been met and that additional discovery is
warranted into whether any of the Oil Companies’ environmental remediation costs were
incurred under the related contracts. Def.’s Reply at 35. The Government also claims that
further discovery is required to establish “affirmative defenses that the United States intends to
raise should the Court deny our motion to dismiss,” including contributory negligence or setoffs
due to insurance. See id. at 35, 38–40.

         This Court’s August 4, 2020 Order instructed the parties to undertake liability discovery;
it excluded damages discovery, which the Court defined as issues related to “offset claims or
defenses, the nature, timing and amounts of any releases of pollution or waste at the Lake
Charles Facility, and the size and scope of remediation areas at the Lake Charles Facility.” See
Aug. 4, 2020 Order, ECF No. 30. Through liability discovery, Citgo has demonstrated that there
is no genuine dispute as to any material fact on the Avgas Contract. See Alamanza, 935 F.3d
at 1336–37. Therefore, it is entitled to a finding of liability as to the validity of the Avgas
Contract, its indemnification under the Avgas Contract, and the inapplicability of the Avgas
Settlement. Partial summary judgment as to liability on those bases is granted in Citgo’s favor as
to Counts I and II. Any issues related to “offset claims or defenses, the nature, timing and
amounts of any releases of pollution or waste at the Lake Charles Facility, and the size and scope
of remediation areas at the Lake Charles Facility” are preserved for further discovery and
litigation. See Aug. 4, 2020 Order.

               2.     The Right of Way Agreement

       The Right of Way Agreement gave the United States permission to build a pipeline
connecting its rubber plant, Butadiene Plancor 706, to a Surge Pond located at Cities Service’s
Lake Charles Refinery. It also agreed:

                                                25
       to construct and maintain said pipeline in such condition that the escape of any
       products transported therein shall be prevented and should the property of grantor
       or any other corporation, person or firm be injured or destroyed thereby grantee
       also agrees to assume and pay all damages resulting therefrom, and grantee also
       agrees to indemnify grantor for losses, claims, demands and suits for damages to
       property and injury to or death of persons, including court costs and attorneys’ fees,
       incident to or resulting from grantee’s exercise of the rights herein granted.
Compl. Ex. C at 2 (emphasis added); see also Compl. ¶ 27.
                       a. The Right of Way Agreement’s Indemnification Provision Covers
                          CERCLA Costs.

         Similar to the Avgas Contract’s indemnification provision, the Government does not
meaningfully dispute Citgo’s claim for reimbursement of environmental costs stemming from
remediation of the Surge Pond under the ROW Agreement. See Def.’s Mot. at 24. Likewise, the
question here is whether the indemnification language is “specific enough to include CERCLA
liability or general enough to include any and all environmental liability.” DuPont, 365 F.3d at
1373.
        The Contract “agrees to assume and pay all damages” and “agrees to indemnify grantor
for losses, claims, demands and suits for damages to property.” Compl. Ex. C at 2. The
language does little to limit the broad scope of potential liability. Indeed, “all damages” is
“general enough to include any and all environmental liability.” Ford Motor, 378 F.3d
at 1321–22. Once again, Shell Oil I is dispositive. There, the government had a duty to
reimburse “any new or additional . . . charges . . . by reason of the production, manufacture, sale
or delivery of avgas.” Id. (citing Shell Oil I, 751 F.3d at 1292). Here, the ROW Agreement
indemnifies costs “incident to or resulting from” the operation of the government exercise of the
Butadiene Plant Effluent Disposal System. Id. As Plaintiffs point out, this language is markedly
broader than the indemnification upheld in Shell Oil I. Pls.’ Cross Mot. at 30. Accordingly, the
ROW Agreement’s indemnification provision covers CERCLA and related environmental
cleanup costs.
                       b. The Mutual Release of Butadiene Production Claims Released
                          Citgo’s Contractual Claims Under the Right of Way Agreement.

        Instead of contesting the ROW Agreement itself, the Government claims that, similar to
the Avgas Contract, a 1957 settlement agreement (the “Mutual Release”) bars Plaintiffs’
reimbursement request. See Def.’s Mot. at 20. It maintains that Cities Service Refining
Corporation “released the United States from all past or future claims that it ‘may have’ ‘in
connection with’ the Government’s operation of the butadiene facility,” and that Plaintiffs
therefore fail to state a claim for relief. Id. at 21 (quoting CFC-Appx30–31). Again, the
question is whether the release is enforceable against prospective claims because it “either
expressly refer[s] to future claims or include[s] language that indicates prospective application.”
Chevron, 155 Fed. Cl. at 352 (citing Augustine Med., 194 F.3d at 1371).

                                                26
        In 1955, the United States sold Butadiene Plancor 706 to a joint venture that included
Cities Service. See Def.’s Mot. at 6, 17; Compl. Ex. D at 8. In 1957, the government and Cities
Service signed a Mutual Release related to outstanding Butadiene Plancor 706 claims. The
agreement ended with the following recital:

       Cities, in consideration of the foregoing release granted to it by FFC [Federal
       Facilities Corporation, an instrumentality of the United States], does, in addition to
       the aforesaid payment made by it to FFC, hereby releases and forever discharges
       the United States, FFC and all other Federal Agencies, of and from any and all
       claims, causes of action and demands whatever which it may now or hereafter,
       either in law or in equity, against the United States, FFC, or any other Federal
       Agency, as a result of, or in connection with, the operation of the said Facility
       Plancor 706 under the Operating Agreement SR 37, as amended.

CFC-Appx30–31. The parties dispute the context of this agreement. First, the Oil Companies
challenge whether the agreement ever applied to the butadiene plant, arguing that the release was
limited to disputes over employee benefit plans. See Pls.’ Cross Mot. at 31.

       In resolving this dispute, the “plain and unambiguous meaning of the written agreement
controls.” Craft Mach. Works, Inc., 926 F.2d at 1113 (Fed. Cir. 1991). The Mutual Release
includes multiple relevant recitals. First, as the Oil Companies correctly note, the Release
describes:

       In the negotiations for making final settlement under the terms of the Operating
       Agreement SR 37, as amended, there arose between FFC and Cities controversies
       relative to the Vacation, Retirement and Thrift Plans instituted for the benefit of
       employees who had been engaged in the operation of the Facility Plancor 706.

CFC-Appx29.

         The Mutual Release also reserves certain claims: “Cities is not released or discharged
from those obligations, liabilities, and rights which may exist with respect to technical
information and patents under the said Operating Agreement, as amended, and under the
Butadiene Lease Contract.” CFC-Appx30. This provision counters Plaintiffs’ claim that the
Mutual Release was limited to employee benefit plans; if so, the release would have no reason to
clarify that a larger subset of claims were excluded from release.

       Next, Plaintiffs assert that this paragraph on technical information reserves claims under
the ROW Agreement. See Pls.’ Sur-Reply at 19. Contrary to Plaintiffs’ argument, this provision
does not limit the application of “technical information and patents” to just those rights reserved
“under the operating agreement.” See id. Instead, the plain language of this provision reserves
“those obligations, liabilities, and rights which may exist with respect to technical information
and patents” under both the Operating Agreement and Butadiene Lease—which is why “under”
appears twice. CFC-Appx30.

       Plaintiffs read this provision as only reserving those “obligations, liabilities, and rights”
“with respect to technical information and patents” under the Operating Agreement, but as

                                                 27
reserving all rights under the Butadiene Lease. See Pls.’ Sur-Reply at 19. But this disjointed
reading arbitrarily segments the first clause in half where there is no comma, divider, or other
indication that the series should be limited. Rather, “obligations, liabilities, and rights” is limited
by “with respect to technical information and patents,” under both the Operating Agreement and
the Butadiene Lease. See Anthem Builders, Inc v. United States, 121 Fed. Cl. 15, 28 n.23 (2015)
(“Where there is a straightforward, parallel construction that involves all nouns or verbs in a
series, a prepositive or postpositive modifier normally applies to the entire series.”) (quoting
Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts, 147–51
(2012)).

        Plaintiffs’ reading would also result in no limit on the rights that are reserved under the
Butadiene Lease, which renders “under” meaningless and buries a plenary reservation of rights at
the end of a limited series of reservations. See Abraham v. Rockwell Intern. Corp., 326 F.3d
1242, 1254 (Fed. Cir. 2003) (“Specific terms and exact terms are given greater weight than
general language.”) (quoting Restatement (Second) of Contracts § 203(c) (1981)); accord
Bennett v. Spear, 520 U.S. 154, 173 (1997) (describing duty to “give effect, if possible, to every
clause and word of a statute”).

        Lastly, contrary to Plaintiffs’ assertion, the Butadiene Lease Contract does mention
“technical information,” such as the submission of “plans, designs, specifications and schedules
as may be required for the construction and equipment of the butadiene plant.” CFC-Appx39.
The Oil Companies are correct that the Lease does not appear to mention patents, but this term is
also not included in the Operating Agreement either, solidifying the reservation of these rights
that “may exist,” not ones that did currently exist. CFC-Appx30; see CFC-Appx48–71. Thus,
the plain language only reserves limited rights unrelated to indemnification under the ROW
Agreement.

         After discussing employee benefit plans and technical information, the Mutual Release
states an intent to release all claims. It notes that “the parties have agreed to compromise and
settle their respective claims growing out of said Operating Agreement SR 37” and “release by
each of the other from any and all claims and demands whatsoever that may have arisen, or may
hereafter arise, in connection with, or as a result of, the operation of the Facility Plancor 706 by
Cities Service under the terms of said Operating Agreement 37.” CFC-Appx29. Further in, the
Release provides a broad release of the government’s claims:

       FFC . . . does, by these presents, release and forever discharge Cities, its affiliates,
       successors and assigns, of and from any and all claims, causes of action and
       demands whatsoever, which it or the United States may now or hereafter have,
       either in law or in equity, against Cities, its affiliates, successors and assigns, or any
       of them, as result of, or in connection with, the operation by Cities of the Facility
       Plancor 706, under the Operating Agreement SR 37.

CFC-Appx30. Finally, it provides similarly broad language for Cities Service’s claims,
affirming that the company does “hereby release and forever discharge the United States . . .
from any and all claims, causes of action and demands whatever which it may now or hereafter
have . . . as result of, or in connection with, the operation of the said Facility Plancor 706, under
the Operating Agreement SR 37.” Id.
                                                  28
        The language “release and forever discharge . . . from any and all claims . . . now or
hereafter,” id., is sufficiently “future-oriented” to imply that Cities Service may have prospective
claims. Augustine Med., 194 F.3d at 1371. Nevertheless, the Release expressly refers to the
prospective application of this future claim and then releases liability. See Chevron, 155 Fed. Cl.
at 352. And it goes far beyond the “not now known” language of Ford Motor, with three
invocations of future tense. Under the standards set forth in Augustine Medical and Ford Motor,
this constitutes a release of liability for future events.

          The Oil Companies emphasize that the release clause included “under the Operating
Agreement,” as opposed to application of the ROW Agreement. Pls.’ Cross Mot. at 31. This
contention is unpersuasive. The Operating Agreement actually governed the plancor’s operation.
The ROW Agreement granted an easement for the installation of a system “for the disposal of
boiler blowdown and softener sludge” stemming from plant operation by the Operating
Agreement. Compl. Ex. C at 1. And it again invokes the Operating Agreement in stating
“grantee’s exercise of the rights herein granted”—i.e., rights to remove waste from plant
operations. Id. at 2. Ostensibly, Citgo’s claim for indemnification under the ROW Agreement
extends to costs “resulting from grantee’s exercise” of the Butadiene Effluent Disposal System
from operation of the butadiene plant, and not from costs resulting from only “the construction
maintenance and operation of such pipeline” as an instrument of the Lease. Id. Plaintiffs cannot
have it both ways, where the ROW Agreement’s indemnification covers cleanup charges
resulting from operation of Butadiene Plancor 706, but where the release of “any and all claims
. . . as a result of, or in connection with, the operation of the said Facility Plancor 706” would not
include the operation of the plant itself. CFC-Appx30.

        Moreover, Plaintiffs acknowledge the interplay between the various agreements covering
Butadiene Plancor 706. Plaintiffs characterize the ROW Agreement as a “stand-alone
document” in light of the Operating Agreement and various iterations of the Butadiene Lease.
Pls.’ Cross Mot. at 35. However, they also argue that “[t]he ROW Agreement was incorporated
into, and is not separate from, the Lease.” Pls.’ Sur-Reply at 20 n.13; see also Pls.’ Cross Mot.
at 31–32, 35; Pls.’ Sur-Reply at 20 (“[T]he Lease expressly recognized that such instruments like
the ROW Agreement would be executed and incorporated into the Lease, and in this case, must
control the parties’ subsequent obligations.”); Oct. 3, 2022 Hr’g Tr. at 56:19–21.

        The Operating Agreement, entered into just one month after the Butadiene Lease, also
recognized that it extended from the Lease. See CFC-Appx49 (“[U]nder the terms of the
Butadiene Lease Contract, Contractor has further agreed to become the lessee of the Butadiene
Plant.”); CFC-Appx69 (“This contract shall automatically terminate upon cancelation or
termination of the Butadiene Lease Contract.”). While each of these documents—the ROW
Agreement, Butadiene Lease, and Operation Agreement—are different, operation of the plant
could not have occurred without each of them. The documents also do not consistently refer to
one another. Plaintiffs correctly note that the ROW Agreement does not mention the Operating
Agreement, but fail to recognize that the ROW Agreement similarly does not mention the Lease.

       Despite this gap, the interplay of the three documents is clear: it is the Operating
Agreement that controls the production of butadiene and resulting production of waste. By
contrast, the ROW Agreement contains the easement controlling disposal of that waste. The
agreement reflects that Cities Service’s operation of the butadiene plant necessitated a system
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whereby the RFC “approved a project covering the construction and installation of a Butadiene
Plant Effluent Disposal System.” Compl. Ex. C at 1, 2. The operation of this system as an
ancillary to the larger plant operations directed by the Operating Agreement plainly falls within
causes of action “as a result of, or in connection with, the operation of the said Facility Plancor
706, under the Operating Agreement SR 37.”

                        c. Citgo is not Entitled to Relief or Partial Summary Judgment as to
                           the Government’s Liability Under the Right of Way Agreement.

        Plaintiffs have not demonstrated that Cities Services released prospective claims against
the government stemming from Butadiene Plancor 706’s operation, which encompassed the
ROW Agreement. The Government moved to dismiss the ROW Agreement claim because of
the mutual release. See Def.’s Mot. at 20–21. When discovery outside the pleadings is presented
on a motion under RCFC 12(b)(6), “the motion must be treated as one for summary judgment
under RCFC 56.” RCFC 12(d); see Advanced Cardiovascular Sys. Inc. v. Scimed Life Sys., Inc.,
988 F.2d 1157, 1164 (Fed. Cir. 1993); Ríos-Campbell v. U.S. Dep’t of Commerce, 927 F.3d 21,
24 (1st Cir. 2019) (“When . . . substantial discovery has taken place, the plausibility standard
[ends].”).

         To grant summary judgment as to Citgo’s indemnification under the ROW Agreement,
the Oil Companies bear the burden of demonstrating the absence of a genuine dispute of material
fact and must show an entitlement to judgment as a matter of law. RCFC 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Plaintiffs have established that the ROW Agreement contains
an indemnification clause that would reimburse Citgo for CERCLA liability stemming from the
government’s operation of the Effluent Disposal System from Butadiene Plancor 706. However,
for the reasons stated above, Plaintiffs have not proven entitlement to indemnification because
any surviving claims under the ROW Agreement were released by Cities Service. Accordingly,
partial summary judgment as to liability under the ROW Agreement is denied as to Plaintiffs and
granted in favor of the United States.10

IV.     Conclusion

       At this stage in the litigation, discovery is still required as to the full extent of pollution at
the Lake Charles Refinery Complex and Citgo’s incurred remediation costs. See Aug. 4, 2020
Order. “If history serves a purpose in this case, it is to show that in the 1940s, as today, avgas
production results in byproducts,” some of which helped the war effort, and “some of which are
wastes.” Shell Oil I, 751 F.3d at 1307 (Reyna, J., dissenting). The United States and the Oil
Companies are still handling the aftermath and likely will do so for some time. Given the

10
    In addition to the Mutual Release, the Government argues that the Butadiene Lease
agreement contains its own liability provision which holds the United States “harmless against
any liability whatsoever because of accidents or injury to persons or property because of the
operation of the plant, its easement, or rights of way.” CFC-Appx43–44; see Def.’s Mot. at 21.
The Government also claims that the Anti-Deficiency Act bars open ended indemnity provisions
like that under the ROW Agreement. Def.’s Mot. at 24. However, these arguments are moot
because Citgo has not established its entitlement to indemnification as a matter of law based on
the mutual release.
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ongoing nature of this matter, the parties would be well advised to consider a dispute resolution
process to address costs and damages moving forward rather than continuing to litigate these
matters.
       For the reasons set forth above, the Court issues the following rulings:
           1. Defendant’s Motion to Dismiss Plaintiffs’ breach of contract claims under the
              Avgas Contract (Counts I and II) is DENIED;

           2. Defendant’s Motion to Dismiss Plaintiffs’ breach of contract claim under the
              ROW Agreement (Count V) is GRANTED as to Oxy USA and GRANTED as to
              Citgo Petroleum; Plaintiff Oxy USA’s claims are DISMISSED, and Oxy USA is
              DISMISSED from the case;

           3. Plaintiffs’ Motion for Summary Judgment on Liability for indemnification under
              the Avgas Contract (Counts I and II) is GRANTED;

           4. Plaintiffs’ Motion for Summary Judgment on Liability for indemnification under
              the Right of Way Agreement (Count V) is DENIED; Defendant’s Motion for
              Summary Judgement on Liability for indemnification under the Right of Way
              Agreement is GRANTED.

       IT IS SO ORDERED.

                                                   s/ Carolyn N. Lerner
                                                  CAROLYN N. LERNER
                                                  Judge

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