Court Opinion

ID: 9487498
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:17:59.293563+00
Date Added: 2024-06-11T17:52:18.190519
License: Public Domain

PAULINE NEWMAN, Circuit Judge,
dissenting.
This case turns on whether a party before the Court of Federal Claims can rely on a procedural decision whereby that court dismissed, as improperly filed, another claim of the same contract. The Board held that West Coast was required to follow, as to Claim II, the procedure that the court had declared invalid as to Claim I. By this procedural snare West Coast has been denied the right to appeal the merits of its claim.
In my view neither West Coast nor the Navy had the choice, much less the right, to ignore the decision of the Court of Federal Claims. Indeed the Navy did comply with that decision for a while, in this and other cases. However, the Navy changed its position after it was too late for West Coast to return to the invalid procedure. West Coast was fatally prejudiced by respecting the deci*316sion of the Court of Federal Claims. The Navy’s disrespect to that court is contrary to law, as well as unfair to those who do business with the government. It should not be ratified by the Federal Circuit.1
I
CHRONOLOGY
The sequence of events is important, as is the passage of critical time periods.
A
On March 27, 1987 West Coast filed a claim (Claim I, the paving claim) with the Resident Officer in Charge of Construction (ROICC). The ROICC sent the claim to the contracting officer, who denied it on June 17, 1987. On June 16,1988 West Coast appealed the denial of Claim I to the Court of Federal Claims. On December 18, 1989 that court, on the government’s motion, held that it was incorrect for West Coast to have filed the claim with the ROICC instead of directly with the contracting officer. The Court of Federal Claims held that because West Coast “never submitted a proper claim to the contracting officer under the Contract Disputes Act, the contracting officer’s decision is invalid,” and dismissed the appeal for lack of jurisdiction. West Coast General Corp. v. United States, 19 Cl.Ct. 98, 101 (1989).
Meanwhile, Claim II (the gas line claim here at issue) had entered the contract disputes system. On October 7, 1988 West Coast filed Claim II with the ROICC, who again sent the claim to the contracting officer, who denied it on April 26, 1989. West Coast had until April 28, 1990 to appeal to the Court of Federal Claims. However, on December 18, 1989 West Coast learned from the Court of Federal Claims that filing with the ROICC was incorrect and the contracting officer’s decision invalid. West Coast, supra. On January 4, 1990, West Coast wrote the Navy’s counsel as follows:
This decision indicates claims must be addressed to the C.O., not the ROICC. I think this invalidates COFD# 89-8 [Claim II], d/4-26-89. I would like to discuss with you how we should handle this problem.
Joint Stip. ¶ 9; see ASBCA op. at 2. There ensued several discussions, as well as the reopening of settlement negotiations. A stipulated fact is:
[T]he attorneys for West Coast and the Southwest Division agreed that West Coast might be required to resubmit a request for a final decision on the gas line claim and have a new final decision issued if settlement was not reached.
Joint Stip. ¶ 14. The settlement negotiations failed a few months later, and West Coast resubmitted Claim II to the contracting officer on June 16, 1990. It is relevant that the Navy had earlier required such resubmission in a separate case, relying on the decision in West Coast. A stipulated fact is:
On January 18, 1990, the contracting officer for the Southwest Division issued a letter regarding the Lanthier claims stating:
Pursuant to the recent U.S. Claims Court decision in West Coast General Corp. v. U.S., No. 354-88C, the subject claims of Lanthier Construction were not properly submitted until their submission by your letter to this command dated January 3, 1990 ....
Joint Stip. ¶ 13; see ASBCA op. at 2.
Nonetheless, when West Coast resubmitted Claim II the contracting officer refused to decide it. Again quoting from the stipulated facts:
On June 28, 1990, the contracting officer for the Southwest Division responded to West Coast’s resubmission stating:
* * * ^ # *
This activity does not agree nor did anyone with appropriate authority ever agree that the subject contracting officer’s final decision is a nullity as a result of the decision in West Coast General Corporation v. U.S., 19 Cl.Ct. 98. Accordingly, the “gas line” claim will not be reconsidered and the previously rendered final decision remains in effect.
Joint Stip. ¶ 16. The contracting officer denied the “appropriate authority” of the Court of Federal Claims, and stated that the Navy would not comply with the court’s ruling. However, the time for West Coast to appeal *317to the Court of Federal Claims from the “invalid” decision had expired on April 28, 1990.
B
The Navy argues that West Coast should have ignored the holding of the Court of Federal Claims, and should have proceeded with Claim II as if the ruling in Claim I did not exist. It is surely untenable to require a party to continue to litigate a procedural issue that it has just lost in another claim of the same contract. West Coast’s actions were reasonable and served to advance resolution of the merits of the claim. Indeed, to relitigate the identical procedural issue would have been an irresponsible use of the client’s and taxpayers’ resources.
Whatever the reason for the Navy’s change of position for Claim II, we should not affirm a ruling whose effect is that a decision of the Court of Federal Claims will not be respected, even by a party to the same contract.
The panel majority states that since the judges on the Court of Federal Claims are unencumbered by each other’s rulings, and can ignore them, West Coast should have ignored the decision of the Court of Federal Claims in West Coast However, stare deci-sis among judges is not the issue. The issue is whether Wést Coast was entitled to rely on the court’s holding in the circumstances of this case. In my view it was so entitled, and the Navy’s prejudicial change of position should not be ratified.
II
THE SUBSEQUENT CHANGE IN LAW
West Coast’s resubmission of Claim II to the contracting officer, on June 19,1990, was made in accordance with the existing law of the Court of Federal Claims. Nine and a half months later the Federal Circuit held, in a different case, that it was indeed acceptable for a contractor to file its claim with the ROICC for forwarding to the- contracting officer. Dawco Construction, Inc. v. United States, 930 F.2d 872, 879-80 (Fed.Cir.1991). The Board now gives retrospective effect to Dawco, holding that the events concerning West Coast’s Claim II, all of which occurred before the Federal Circuit decided Dawco, nonetheless are subject to Dawco. That is, the Board held — and this court agrees — that West Coast was required to prosecute its initial filing of Claim II, despite the holding of the Court of Federal Claims in West Coast that the contracting officer’s decision was invalid.
In determining when a judicial decision is applied nonretroactively, the Supreme Court has provided comprehensive guidance:
First, the decision to be applied nonretro-actively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, it has been stressed that “we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Finally, we have weighed the inequity imposed by retroactive application, for “[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘injustice or hardship’ by a holding of nonretroactivity.”
Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355, 30 L.Ed.2d 296 (1971) (alterations in original) (citations omitted).
Each of the three Chevron criteria is on the side of West Coast. Dawco overruled the precedent of the Court of Federal Claims on which West Coast relied; retrospective operation retards the purpose of facilitating review of contract disputes on their merits; and the result is “injustice or hardship”, for the right to appeal the merits is thereby lost. Indeed, had West Coast continued to prosecute Claim II after the Court of Federal Claims held that the contracting officer’s decision was invalid, counsel might have had to defend against the charge of frivolousness, as well as wasting the client’s resources in appealing an invalid decision.
*318West Coast’s counsel proceeded in compli-anee with law. The Navy’s change of position was unwarranted, unfair, and contrary to principles of judicial review. The Board’s retroactive application of Dawco is contrary to the principles of Chevron and of justice. I can not join in affirming this disposition,