Court Opinion

ID: 9486590
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:53:44.227007+00
Date Added: 2024-06-11T17:51:49.135513
License: Public Domain

DECISION
RADER, Circuit Judge.
Hoskins Lumber Co., Inc. (Hoskins) and the United States Forest Service (Forest Service) cross appeal from the United States Court of Federal Claims’ decision that Hos-kins defaulted on its timber contract. Hoskins Lumber Co. v. United States, 24 Cl.Ct. 259 (1991). This court affirms the decision of the Court of Federal Claims on default. Following the default, the Forest Service dedicated the area covered by the contract as protected habitat for the Northern Spotted Owl. Because the Government did not resell this timber, the trial court declined to award damages to the Government for Hoskins’ default. Hoskins Lumber Co. v. United States, No. 323-88 C (Fed.Cl. Jan. 31, 1992). Be*1146cause the contract expressly contained a method of damages calculation if the timber was not resold, this court reverses and remands to the Court of Federal Claims for a determination of the damages under the contract.
BACKGROUND
On October 13, 1978, Hoskins entered into the Griffith Middlefork 78 Timber Sale, Contract No. 062778. By contract terms, Hos-kins agreed to cut, remove, and pay for timber from the Alsen Ranger District of the Siuslaw National Forest. The parties later agreed to extend the contract completion date to December 31, 1984.
In the late 1970s and early 1980s, the timber market collapsed. In response to tumbling timber market prices, the Forest Service authorized the Multi-Sale Extension Program (Program). Under the Program, timber contract holders could extend their contract termination dates by up to five years. The Final Notice of the Program, published in the Federal Register, gave February 16,1984 as the deadline for contractors to file under the Program. Extension of Certain Timber Sale Contracts, 48 Fed.Reg. 54,812 (1983) (to be codified at 36 C.F.R. § 223).
In April 1983, several contractors, including Hoskins, filed a class action suit requesting relief from timber contracts on the basis of impracticability. On February 15, 1984, the district court issued an injunction preventing the Government:
(1) from enforcing in any manner the contracts at issue in this action ...; (2) from enforcing the current February 15, 1984 deadline ...; and (3) [granting] the members of plaintiffs’ class 30 days following the dissolution of the preliminary injunction to submit and have considered by the [Government] a five-year plan
North Side Lumber Co. v. Block, Civ. No. 83-490-BU (D.Or.1984).
On February 16, 1984, Hoskins asked the Regional Forester if he interpreted the North Side injunction as allowing Hoskins thirty days beyond dissolution of the injunction to file under the Program. The Regional Forester responded affirmatively. On March 21,1984, the Contracting Officer (CO) notified Hoskins that its contract was subject to the North Side injunction. On October 29, 1984, the CO notified Hoskins that its contract would “conditionally” extend until thirty days after dissolution of the injunction.
On February 20, 1985, the Court of Appeals for the Ninth Circuit ruled that the North Side district court lacked subject matter jurisdiction over this contract claim. North Side Lumber Co. v. Block, 753 F.2d 1482 (9th Cir.) cert. denied, 474 U.S. 931, 106 S.Ct. 265, 88 L.Ed.2d 271 (1985). The Government offered a settlement by which contractors could file under the Program in exchange for dismissal with prejudice. A letter from the Forest Service stated that:
The Forest Service contends that it does not have to accept MSEP’s [Multi-Sale Extension Plans] from class members, except from those who choose to accept and sign the settlement agreement.
Hoskins elected not to take the settlement.
On March 28, 1986, the CO notified Hos-kins that it was in default. The Forest Service rejected as untimely Hoskins’ filing under the Program. Hoskins filed after February 15, 1984 deadline, but within thirty days of dissolution of the invalid injunction.
Hoskins sought relief in the Court of Federal Claims. Both parties moved for summary judgment. The trial court granted the summary judgment motion of the Forest Service “as to liability,” but awarded no damages. Hoskins Lumber, 24 Cl.Ct. at 268. Later the Court of Federal Claims dismissed the Forest Service’s counterclaim for damages. Hoskins Lumber Co. v. United States, No. 323-88 C (Fed.Cl. Jan. 31, 1992). Both parties appealed.
DISCUSSION
This court reviews judgments of the Court of Federal Claims for clear errors in factual determinations and errors in legal determinations. Transamerica Ins. Corp. v. United States, 973 F.2d 1572, 1576 (Fed.Cir.1992). Neither party disputes the trial court’s factu*1147al determinations in this ease. This court reviews the trial court’s determinations of law, including contract interpretation, de novo. B.D. Click Co. v. United States, 614 F.2d 748, 752, 222 Ct.Cl. 290 (1980).
Timeliness
The North Side injunction granted the members of the class thirty days after the dissolution of the injunction to file under the Program. Hoskins’ case before the Court of Federal Claims sought to enforce deadlines in the injunction. Hoskins requested the trial court to honor the invalid injunction’s thirty-day grace period for filing under the Program. The Court of Federal Claims determined:
Giving effect to an order issued by a court without jurisdiction violates basic principles of judicial power_ Dissolution of the North Side injunction meant that the Forest Service could enforce the contract without showing contempt for the court order, and enforce the February 15, 1984 deadline as well.
Hoskins Lumber, 24 Cl.Ct. at 263 (citations omitted). This court detects no error in this determination.
The Supreme Court’s holding in United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947), does not support Hoskins’ reliance on the terms of an injunction issued without jurisdiction. In United Mine Workers, the Court affirmed a trial court’s inherent power to enforce its injunctions. When the union in that case engaged in enjoined conduct, the district court held it in criminal contempt. Although later rulings invalidated the injunction, the union had nonetheless violated a court order. Therefore, the Court upheld the charge of criminal contempt. Id. at 303, 67 S.Ct. at 701; see also Hampton Tree Farms, Inc. v. Yeutter, 956 F.2d 869 (9th. Cir.), cert. denied, — U.S. -, 113 S.Ct. 56, 121 L.Ed.2d 25 (1992). The Supreme Court clarified that only criminal, not civil, contempt proceedings would survive invalidation of an injunction for jurisdictional reasons. United Mine Workers, 330 U.S. at 295, 67 S.Ct. at 697; see also Latrobe Steel Co. v. United Steelworkers, 545 F.2d 1336 (3d Cir.1976).
United Mine Workers does not support Hoskins’ attempt to give effect to the terms of an invalid injunction. Rather United Mine Workers clarifies the effect of a criminal contempt charge based on violation of an invalid injunction. The Court of Federal Claims correctly determined that United Mine Workers does not require enforcement of the invalid injunction in this case.
The letter from the CO “conditionally” extending Hoskins’ opportunity to enter the Program did not modify the contract between the parties to grant Hoskins the time extension ordered by the invalid injunction. At the time the CO sent the letter in October 1984, the injunction was in effect. The letter merely acknowledged the CO’s obligation to comply with the terms of the injunction as long as it was in effect. Once the injunction was dissolved, the CO’s provisional measures indicating a willingness to comply with court orders did not bind the Forest Service to comply with the terms of an invalid injunction. A letter written months before invalidation of the injunction could not revive its terms. Indeed, in this case, the CO had no authority to 'extend the deadline for filing. See 36 C.F.R. § 223.115 (1993).
Hoskins knew or should have known that it could not rely on an injunction on appeal. Hoskins could have taken advantage of the settlement or protectively filed within the original deadline. For all these reasons, this court affirms the holding of the Court of Federal Claims regarding Hoskins’ default.
Damages
The Court of Federal Claims dismissed the Forest Service’s counterclaim for damages. However, section B9.4 of Hoskins’ contract states:
Failure to Cut. In event of ... Purchaser’s failure to cut designated timber on portions of Sale Area by Termination date, Forest Service shall appraise remaining Included Timber....
... If there is no resale, damages due shall be determined by subtracting the value established by said appraisal from the *1148difference between Current Contract Value and Effective Purchaser Credit.
Thus, the parties expressly agreed to a measure of damages in the event of no resale. In this case, no resale occurred. Therefore, the parties’ agreement governs the measure of damages. The Court of Federal Claims erred in dismissing the counterclaim.
In the interim between the decision of the Court of Federal Claims and the instant appeal, this court decided Madigan v. Hobin Lumber Co., 986 F.2d 1401 (Fed.Cir.1993), a case legally indistinguishable from this appeal. In Hobin, this court required compliance with the express measure of damages envisioned by the contract in the event of no resale:
[W]e conclude that the agreed-upon contract term, providing that the government is entitled to damages and providing the method of calculating those damages in the event that the government does not resell the timber, must be enforced in this case in accordance with general principles of contract law and established precedent.
Id. at 1405-06. In addition to the terms of the contract, this prior ruling of this court requires enforcement of section B9.4 of Hos-kins’ contract.
The trial court erred by relying on Louisiana-Pacific Corp. v. United States, 227 Ct.Cl. 756, 1981 WL. 21434 (1981). Under the “special circumstances” of that case, the United States .Court of Claims awarded no damages for a contractor’s default on a timber contract:
[The contract] should not be read to call for recovery of damages from plaintiff for uncut timber which the Government has no intention of selling but wishes to preserve indefinitely. In that situation the Government would not be injured or damaged by the non-cutting, and does not deserve' any monetary compensation for the failure to cut.
Id. at 758.
In Hobin, this 'court also clarified that Louisiana-Pacific does not apply here:
Louisiana-Pacific should only apply in those cases where the government decides during the period of contract performance that it does not want all of the contract timber cut, where the government attempts to modify the contract during the period of contract performance to limit the timber the contractor is otherwise required to cut but the contractor refuses, and where the government subsequently seeks to recover damages on that precise timber.
Id. at 1405. This court further stated, “no similar ‘estoppel’ theory can be applied in this case, and Louisiana-Pacific is not controlling.” Id. Rather the language of the contract governs.
Accordingly, this court remands the issue of damages to the Court of Federal Claims for application of the contract section setting forth a measure of damages in the event of no resale.
CONCLUSION
This court affirms the trial court’s grant of summary judgment in favor of the Government on the question of Hoskins’ default. However,- this court holds that the Government is entitled to damages under the formula in the contract. Therefore, this court reverses and remands for a determination of the Government’s damages.
COSTS
Each party to bear its own costs.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND REMANDED.