Court Opinion

ID: 5134708
Source: CourtListenerOpinion
Date Created: 2021-12-14 17:00:56.217231+00
Date Added: 2024-06-11T08:23:45.449951
License: Public Domain

Case: 20-2341    Document: 46     Page: 1   Filed: 12/13/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                TOLLIVER GROUP, INC.,
                   Plaintiff-Appellee

                             v.

                    UNITED STATES,
                   Defendant-Appellant
                  ______________________

                        2020-2341
                  ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:17-cv-01763-CFL, Senior Judge Charles F. Lettow.
                   ______________________

                Decided: December 13, 2021
                  ______________________

     WALTER BRAD ENGLISH, Maynard, Cooper & Gale, PC,
 Huntsville, AL, argued for plaintiff-appellee. Also repre-
 sented by EMILY J. CHANCEY; MICHAEL W. RICH, Burr &
 Forman LLP, Mobile, AL.

     ASHLEY AKERS, Commercial Litigation Branch, Civil
 Division, United States Department of Justice, Washing-
 ton, DC, argued for defendant-appellant. Also represented
 by BRIAN M. BOYNTON, MARTIN F. HOCKEY, JR., TARA K.
 HOGAN.
                  ______________________

     Before DYK, TARANTO, and CHEN, Circuit Judges.
Case: 20-2341    Document: 46      Page: 2    Filed: 12/13/2021

 2                             THE TOLLIVER GROUP, INC.   v. US

 TARANTO, Circuit Judge.
     The Tolliver Group, Inc. had a contract with the United
 States under which Tolliver was obliged to write technical
 manuals for government-used equipment and the govern-
 ment was obliged to supply Tolliver certain information
 relevant to that task. When the government failed to ob-
 tain the information, and therefore failed to supply it to
 Tolliver, the parties modified the contract. Tolliver ulti-
 mately produced the manuals.
      After the modification, however, a third party sued Tol-
 liver in the name of the United States under the False
 Claims Act, alleging, among other things, that Tolliver had
 made a false certification of compliance with the original
 contract because Tolliver had not received the information
 that the government was contractually obliged to provide.
 The government, rather than intervening in the case (and
 then dismissing it), allowed the False Claims Act (qui tam)
 litigation to proceed. With evidentiary help from the gov-
 ernment, Tolliver ultimately prevailed in the qui tam case,
 but only after incurring substantial legal fees.
     Tolliver submitted a claim to the government’s con-
 tracting officer under the Contract Disputes Act (CDA), 41
 U.S.C. § 7101 et seq., for an “equitable adjustment” for re-
 imbursement of “allowable legal fees.” J.A. 109. The con-
 tracting officer denied the claim. Tolliver then brought the
 present action in the Court of Federal Claims (Claims
 Court), seeking payment of that claim under 41 U.S.C.
 § 7104(b)(1). The Claims Court entered judgment for Tol-
 liver on the ground that the United States had breached an
 implied warranty of performance. Tolliver Grp., Inc. v.
 United States, 146 Fed. Cl. 475, 479 (2020) (CFC Opinion);
 Tolliver Grp., Inc. v. United States, 148 Fed. Cl. 351, 352
 (2020) (Reconsideration Opinion). We now hold that be-
 cause Tolliver never submitted a claim of breach of that
 warranty to the contracting officer, the Claims Court
 lacked jurisdiction to adjudicate such a claim.
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 THE TOLLIVER GROUP, INC.   v. US                            3

                                I
     In September 2012, Tolliver assumed, by novation, re-
 sponsibility for performance of a 2011 contract with the
 United States Army Contracting Command (Army) to
 write technical manuals addressing how to operate and
 maintain the Hydrema 910 mine-clearing vehicle. 1 Under
 that fixed-price level-of-effort contract, the Army promised
 to provide to Tolliver a “technical data package” (TDP) con-
 taining the manufacturer’s specifications for the vehicle.
 But the Army never in fact provided the TDP to Tolliver
 because it was unable to obtain the information from the
 manufacturer. According to Tolliver, the Army neverthe-
 less directed Tolliver to continue its performance. J.A. 90,
 93, 98, 101. In April 2013, the Army and Tolliver modified
 the contract, converting it to a fixed-price contract, sub-
 stantially lengthening the time for performance, increasing
 its monetary value, and removing the Army’s obligation to
 provide Tolliver the TDP. The parties agree that Tolliver
 successfully fulfilled its obligations under the modified con-
 tract. J.A. 83, 87.
     Meanwhile, in April 2014, Robert Searle, acting in the
 name of the United States, brought an action under the
 False Claims Act, 31 U.S.C. § 3729 et seq., against Tolliver
 in the District Court for the Eastern District of Virginia.
 Searle, as third-party relator, alleged that Tolliver had
 falsely certified compliance with the original contract, de-
 spite never having received the promised TDP. The United
 States declined to intervene in the qui tam suit (a step that,
 had it been taken, would have allowed the government to
 request dismissal of the suit, subject to statutory proce-
 dures). See 31 U.S.C. § 3730(b)(1), (c)(2)(A). With eviden-
 tiary assistance from the government, J.A. 84, Tolliver
 successfully defended the lawsuit, both in the district court

     1   For present purposes, we may, and do, refer to Tol-
 liver and its predecessors on the contract as “Tolliver.”
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 4                              THE TOLLIVER GROUP, INC.   v. US

 and then on Searle’s appeal to the United States Court of
 Appeals for the Fourth Circuit. See United States ex rel.
 Searle v. DRS Technical Servs., Inc., No. 1:14-cv-00402,
 2015 WL 6691973 (E.D. Va. Nov. 2, 2015); United States ex
 rel. Searle v. DRS C3 & Aviation Co., 680 F. App’x 163 (4th
 Cir. 2017).
     In June 2017, after the qui tam suit ended, Tolliver
 sought reimbursement for the legal fees it had expended
 defending the lawsuit. In a letter to the contracting officer,
 Tolliver sought “an equitable adjustment and payment . . .
 in the amount of $195,889.78 for allowable legal fees.” J.A.
 109.    Citing Federal Acquisition Regulations (FAR)
 § 31.205-47, codified at 48 C.F.R. § 31.205-47, Tolliver ar-
 gued that “[a] contractor who successfully defends a False
 Claim[s] Act action is entitled to recover its costs in defend-
 ing the action, including legal fees, up to a maximum of
 80% of those fees.” Id. The contracting officer denied the
 claim, reasoning that the claimed legal fees were neither
 allocable to the contract nor permitted by the terms of the
 fixed-price contract. See J.A. 104–07.
     Tolliver then sued the United States in the Claims
 Court. In its initial complaint, Tolliver stated two causes
 of action. Tolliver alleged that the government had made
 a “Constructive Change” to the contract by requiring Tol-
 liver to proceed without the TDP, and it was that directive
 which provoked the qui tam action and hence caused Tol-
 liver to incur the legal fees for which it was seeking govern-
 ment payment. J.A. 101. Tolliver separately alleged a
 “Breach of Contract – Denial of Allowable Costs,” arguing
 that it was entitled to reimbursement for 80% of its legal
 fees under the FAR. J.A. 101–02.
     After the United States filed a motion to dismiss, Tol-
 liver amended its complaint. For the constructive-change
 claim, Tolliver added that the United States had instructed
 Tolliver to reverse engineer the Hydrema without the TDP
 and that the United States had failed to dismiss the
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 THE TOLLIVER GROUP, INC.   v. US                           5

 meritless False Claims Act suit brought in its name. J.A.
 93–94. For the second claim, Tolliver changed the name of
 the claim to just “Breach of Contract,” added the allegation
 that the government breached the contract by failing to
 provide the TDP as promised, and alleged that Searle’s
 lawsuit was a “direct, proximate and foreseeable result of
 the government’s failure to provide the TDP.” J.A. 94.
     The United States filed another motion to dismiss, and
 at a hearing on the motion, the Claims Court expressed
 skepticism that the claim before it had been before the con-
 tracting officer, saying: “[T]he elements of the claim you
 made to the contracting officer are different from the ele-
 ments of a constructive change or breach of contract claim
 that you [made here]. They’re just different.” J.A. 86–87.
 Tolliver again amended its complaint. J.A. 74–80. The sec-
 ond amended complaint contained a single claim, for “Re-
 covery of Allowable Cost under FAR § 31.205-47.” J.A. 79.
 That complaint survived the United States’ next motion to
 dismiss. Tolliver Grp., Inc. v. United States, 140 Fed. Cl.
 520, 522–23 (2018).
     A year later, the parties both moved for summary judg-
 ment, and the Claims Court granted Tolliver’s motion in
 part and denied the government’s motion. CFC Opinion,
 146 Fed. Cl. at 479. The Claims Court relied on United
 States v. Spearin, 248 U.S. 132 (1918), for the proposition
 that “when the government provides a contractor with de-
 fective, erroneous, or promised but missing specifications,
 ‘the government is deemed to have breached the implied
 warranty that satisfactory contract performance will result
 from adherence to the specifications, and the contractor is
 entitled to recover costs proximately flowing from the
 breach.’” CFC Opinion, 146 Fed. Cl. at 482 (quoting Frank-
 lin Pavkov Constr. Co. v. Roche, 279 F.3d 989, 994–95 (Fed.
 Cir. 2002), which relies on Spearin, 248 U.S. at 136). The
 Claims Court stated that (1) “the Army’s failure to provide
 the [TDP] represented an omission that prevented Tolliver
 from performing the contract as specified” and (2) that
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 6                              THE TOLLIVER GROUP, INC.   v. US

 failure “produced the circumstances that ultimately led to
 the qui tam suit and thus the costs incurred defending
 against it.” Id. at 484. Although Tolliver had not men-
 tioned Spearin or the implied warranty of performance in
 its motion for summary judgment, the Claims Court rea-
 soned that Tolliver had presented “two distinct bases” for
 its claim before the contracting officer: first, that Tolliver
 was entitled to “an equitable adjustment . . . for allowable
 legal fees,” and second, that the fees were “allowable under
 the contract and under FAR § 31.205-47.” Id. at 483 (inter-
 nal quotation marks and citations omitted). Recovery un-
 der Spearin, the Claims Court stated, was permitted as an
 equitable adjustment. Id. The Claims Court did not ad-
 dress recovery under the FAR. Id.
      The United States moved for reconsideration, arguing
 that the claim before the contracting officer was not a claim
 for breach of the implied warranty of performance under
 Spearin and, hence, the Claims Court lacked jurisdiction
 under the CDA to adjudicate a claim of breach of the
 Spearin-recognized warranty. Reconsideration Opinion,
 148 Fed. Cl. at 355. The Claims Court rejected the govern-
 ment’s argument, stating that “Tolliver did not cite Spearin
 in its equitable reimbursement claim to the contracting of-
 ficer, but its submission to that officer emphasized the fail-
 ure by the government to provide the technical data
 package and the resulting direct relationship to the qui
 tam action.” Reconsideration Opinion, 148 Fed. Cl. at 356.
 The Claims Court denied the motion for reconsideration,
 and upon determining that Tolliver’s claimed damages (le-
 gal fees incurred in the qui tam action) were reasonable,
 the court entered a final judgment.
     The United States timely appealed. We have jurisdic-
 tion under 28 U.S.C. § 1295(a)(3).
                               II
     The United States argues that the Claims Court lacked
 jurisdiction to enter a judgment on a claim for equitable
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 THE TOLLIVER GROUP, INC.   v. US                            7

 adjustment based on a breach of the implied warranty of
 performance because such a claim was never presented to
 the contracting officer. We agree. 2
     “Whether the Court of Federal Claims had jurisdiction
 under the CDA is a question of law we decide de novo. A
 plaintiff bears the burden of establishing subject matter ju-
 risdiction by a preponderance of the evidence. We review
 a grant of summary judgment by the Court of Federal
 Claims de novo, drawing justifiable factual inferences in
 favor of the party opposing the judgment.” K-Con Bldg.
 Systems, Inc. v. United States, 778 F.3d 1000, 1004 (Fed.
 Cir. 2015) (cleaned up).
     The CDA mandates that “[e]ach claim by a contractor
 against the Federal Government relating to a contract
 shall be submitted to the contracting officer for a decision.”
 41 U.S.C. § 7103(a)(1). Thus, obtaining a final decision on
 a claim is a jurisdictional prerequisite to adjudication of
 that claim in the Claims Court.             See 41 U.S.C.
 §§ 7104(b)(1), 7103(g); Raytheon Co. v. United States, 747
 F.3d 1341, 1354 (Fed. Cir. 2014) (“It is a bedrock principle
 of government contract law that contract claims, whether
 asserted by the contractor or the Government, must be the
 subject of a contracting officer’s final decision.”); K-Con,

     2    The United States also argues that the Claims
 Court abused its discretion in entering judgment based on
 a theory that was not raised by either party and that, in
 any case, the Spearin doctrine does not apply to the facts
 in this case. United States Opening Br. 14. Because we
 hold that the Claims Court lacked jurisdiction, we need not
 and do not decide those issues, though we note that the
 United States has raised significant questions about
 whether the Spearin doctrine applies here. We also do not
 address whether other theories of recovery might be appli-
 cable here and might yet be presented to the contracting
 officer.
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 8                             THE TOLLIVER GROUP, INC.   v. US

 778 F.3d at 1005 (“Jurisdiction requires both that a claim
 meeting certain requirements have been submitted to the
 relevant contracting officer and that the contracting officer
 have issued a final decision on that claim.”). The purpose
 of the requirement is “to create opportunities for informal
 dispute resolution at the contracting officer level and to
 provide . . . clear notice as to the” content of “contract
 claims.” Raytheon, 747 F.3d at 1354 (internal quotation
 marks and citations omitted).
      When a claim is presented in the Claims Court, we ex-
 amine whether that claim is the “‘same claim’” as the one
 presented to the contracting officer. Id. (quoting Scott Tim-
 ber Co. v. United States, 333 F.3d 1358, 1365 (Fed. Cir.
 2003)). “A claim need not be submitted in any particular
 form or use any particular wording, but it must provide a
 clear and unequivocal statement that gives the contracting
 officer adequate notice of the basis and amount of the
 claim.” K-Con, 778 F.3d at 1005 (cleaned up). We consider
 the remedies sought and the elements of the claims in as-
 sessing whether the sameness requirement is met. Id. The
 focus is on whether the contracting officer was given “an
 ample pre-suit opportunity to rule on a request, knowing
 at least the relief sought and what substantive issues are
 raised by the request.” Id. at 1006.
      Here, the claim that Tolliver presented to the contract-
 ing officer was, on its face, based on allowability under FAR
 § 31.205-47, not based on a breach of the implied warranty
 of performance. Tolliver’s initial statement requesting “an
 equitable adjustment and payment . . . for allowable legal
 fees,” J.A. 109, was at so high a level of generality that,
 without further specification, it could cover materially dis-
 tinct claims, and it did not give adequate notice of any spe-
 cific claim. And when Tolliver’s letter to the contracting
 officer provided the narrowing specificity, the elaboration
 gave adequate notice only that a FAR claim was at issue,
 not that the elements of a breach of the implied warranty
 of performance were at issue.
Case: 20-2341     Document: 46      Page: 9     Filed: 12/13/2021

 THE TOLLIVER GROUP, INC.   v. US                              9

     Tolliver stated simply that “[a] contractor who success-
 fully defends a False Claim[s] Act action is entitled to re-
 cover its costs in defending the action, including legal fees,
 up to a maximum of 80% of those fees,” and it cited for sup-
 port only FAR § 31.205-47 and Fluor Hanford, Inc. v.
 United States, 66 Fed. Cl. 230 (2005). J.A. 109. Tolliver’s
 letter cited no basis other than the FAR regulation. The
 cited Fluor Hanford case involved only a FAR claim, not an
 implied-warranty-of-performance claim. Tolliver did not
 mention such a claim or authority for such a claim. More-
 over, Tolliver requested only $195,889.78, which was the
 80% of incurred fees allowed by FAR § 31.205-47(e)(3)
 (where FAR § 31.205-47 applies), not the total amount of
 the incurred fees ($244,862.22) that might be recovered un-
 der a non-FAR claim. J.A. 110. Although Tolliver attached
 documents from the qui tam lawsuit to its letter, it did not
 call attention to the TDP obligation or the government’s
 failure to provide the TDP; and although it noted that it
 “was forced to incur significant costs to defend itself for per-
 forming under the contract exactly how it was instructed
 to by the government,” J.A. 110, nothing in the letter
 showed that this fact was not just background information,
 but instead a piece of a Spearin claim, whose elements Tol-
 liver did not set forth in substance or words. In these cir-
 cumstances, the contracting officer did not have “adequate
 notice,” K-Con, 778 F.3d at 1005, that Tolliver was raising
 a claim based on the breach of the implied warranty of per-
 formance.
     Contrary to Tolliver’s contention, our decision in Scott
 Timber Co. v. United States, 333 F.3d 1358 (Fed. Cir. 2003),
 does not change the outcome here. In Scott, a company that
 had contracted with the U.S. Forest Service to harvest tim-
 ber in government forests sought consequential damages
 resulting from the government’s suspension of those con-
 tracts. Id. at 1360–62. Before the contracting officer, the
 company contended that the Forest Service lacked author-
 ity under the contracts to suspend operations indefinitely.
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 10                             THE TOLLIVER GROUP, INC.   v. US

 Id. at 1362. Before the Claims Court, the company elabo-
 rated on those broad original CDA claims and identified
 specific contract provisions that the government allegedly
 breached. Id. at 1365–66. We held that the claims before
 the Claims Court and the claims presented to the contract-
 ing officer were “essentially the same” claims, id. at 1366,
 noting that “they ar[o]se from the same operative facts,
 claim[ed] essentially the same relief, and merely assert[ed]
 different legal theories for that recovery,” id. at 1365, and
 that the legal theories were at most “slightly different,” id.
 at 1366.
     In this case, the legal theories are not materially the
 same. The claim presented to the contracting officer
 sought recovery of the expended legal fees as “allowable”
 costs under § 31.205-47. J.A. 109. That required showing
 (1) that Tolliver had incurred legal fees defending a pro-
 ceeding listed in § 31.205-47(b) (here, a qui tam False
 Claims Act lawsuit); (2) that the costs were not rendered
 unallowable under § 31.205-47(b) because of the result of
 the proceeding; and (3) that Tolliver was seeking an appro-
 priate percentage of its expended legal fees, limited by reg-
 ulation to 80%. FAR § 31.205-47(e). By contrast, the
 general elements of the legal theory for the claim on which
 the Claims Court entered its judgment were (1) that the
 contract bound Tolliver to comply with a government-pro-
 vided “design specification” that, if followed, would produce
 a “defective or unsafe” result, Lakeshore Eng’g Servs., Inc.
 v. United States, 748 F.3d 1341, 1349 (Fed. Cir. 2014); see
 also White v. Edsall Constr. Co. v. United States, 296 F.3d
 1081, 1084 (Fed. Cir. 2002); (2) that Tolliver had complied
 with the specification or that compliance was commercially
 impossible, see Al Johnson Constr. Co. v. United States, 854
 F.2d 467, 469–70 (Fed. Cir. 1988); and (3) that Tolliver in-
 curred costs proximately caused by the defect in the speci-
 fication, see Franklin Pavkov Constr. Co. v. Roche, 279 F.3d
 989, 994–95 (Fed. Cir. 2002).
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 THE TOLLIVER GROUP, INC.   v. US                            11

     Without more than what Tolliver provided to the con-
 tracting officer, it cannot reasonably be demanded that the
 contracting officer have recognized that Tolliver was seek-
 ing a determination of the issues raised by a Spearin war-
 ranty-breach claim. Unlike in Scott, considering the two
 claims at issue here to be the same claim for jurisdictional
 purposes would “‘subvert the statutory purpose of requir-
 ing contractors first to submit their claims to the [contract-
 ing officer]’ to allow the [contracting officer] to receive and
 pass judgment on the contractor’s entire claim.” Scott, 333
 F.3d at 1366 (quoting Croman v. United States, 44 Fed. Cl.
 796, 801–02 (1999)).
     Thus, the Claims Court lacked jurisdiction to enter
 judgment on a claim based on a breach of the implied war-
 ranty of performance, because that claim was not first pre-
 sented to the contracting officer for a final decision.
                               III
     For the foregoing reasons, we vacate the judgment of
 the Claims Court. At least because the Claims Court did
 not address the allowability of the claimed fees under the
 FAR, we remand for such further proceedings as may be
 appropriate.
     The parties shall bear their own costs.
                VACATED AND REMANDED