Court Opinion

ID: 9481399
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:17:54.374004+00
Date Added: 2024-06-11T17:48:17.590087
License: Public Domain

PLAGER, Circuit Judge,
with whom NEWMAN, LOURIE and RADER, Circuit Judges, join, dissenting from the Court’s refusal to consider this case in banc.
I respectfully dissent from the Court’s refusal to consider this case in banc and to affirm the Armed Services Board of Contract Appeals’ (Board) jurisdiction to decide the case.1 As discussed at the outset of the panel opinion, that opinion had a difficult gestation period, followed by a painful birth. In its original conception, the panel produced a nonprecedential opinion that I believed to be erroneous but, due to its nonprecedential nature, not broadly significant. Had the matter remained merely one of bad result the case might not warrant our continued attention. But by acquiescing in the Government’s request for a prec-edential opinion, this court sets forth a major policy pronouncement that, in my judgment, is simply wrong. In view of the public interest in this issue (as evidenced by the briefs of amici cited in the panel opinion) and the importance of its correct resolution to the boards and courts that hear these cases,2 I think it appropriate *582that I state why I believe the decision is wrong.
The panel’s pronouncement regarding what is required to certify a claim is not good law. The statute, 41 U.S.C. § 605(c)(1) (1988), requires that “the contractor” certify the claim. The purpose of the certification requirement is clear from the legislative history — the certifier must be an official able to speak for and bind the company regarding the claim. In addition, the legislative history suggests that this mechanism is to prevent fraudulent claims and encourage settlements. Thus, Congress seemingly wanted the person who makes the final decision concerning submission of a claim to be someone with reasonably broad oversight of the company’s affairs and not merely a person with an emotional investment in the dispute. Such a person could best determine whether the claim was justified or able to be settled. Indeed, the Office of Management and Budget’s Office of Federal Procurement Policy (OMB/OFPP) rule; describing eligible certifiers as including the chief executive officer (CEO) who heads the entire company, clearly suggests that no personal involvement in the routine paperwork administration of the contract is expected.
Courts appropriately accord considerable weight to interpretations of an agency with expertise when a statute is ambiguous. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). As we said in Wilson v. United States, 917 F.2d 529, 535-36 (Fed.Cir.1990) (citing Chevron 467 U.S. at 842-44, 104 S.Ct. at 2781-83), “when a statute is silent or ambiguous with respect to the specific issue, the administrative agency’s interpretation, if reasonable, is to be followed by the court.” Courts thus acknowledge the proper role for experts in policymaking. At the same time, we should refuse. to enforce agency interpretations when the statute is not ambiguous and when the interpretation neither demands expertise of an agency nor accords with the thrust of the statute. Board of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S.Ct. 681, 685, 88 L.Ed.2d 691 (1986). As was said in Office of Communication of the United Church of Christ v. Federal Communications Comm’n., 707 F.2d 1413, 1422-23 (D.C.Cir.1983), “[t]o do otherwise would risk diluting the judiciary’s power to stand guard against bureaucratic excesses by ensuring that administrative agencies remain within the bounds of their delegated authority. Indeed, it is the quintessential function of the reviewing court to interpret legislative delegations of power and to strike down .those agency actions that traverse the limits of statutory authority.”
The term “contractor” as used in 41 U.S.C. § 605 of the Contract Disputes Act (CDA) is not ambiguous. The statute simply leaves unspecified the exact title of the certifying official appropriate in a given case and in a given corporate structure. Even assuming agency interpretation was needed, the regulation, 48 C.F.R. § 33.207(c)(2) (1989), by limiting the range of officials able to certify as narrowly as it does, goes beyond reasonable interpretation and denies to a wide range of corporate officials that which the statute grants them. Furthermore, § 2 of the CDA defines the term “contractor.” Congress, by defining “contractor” even in general terms left no room for agencies to adopt stricter or looser definitions of the term. This court should give force to Congress’s language and intent.
The statute delegates to the contractor the power to designate who speaks for it; *583it does not grant to OMB the power to intrude itself into the myriad versions of corporate organizational structures. For example, a valid regulation might specify that the officer who certifies for the contractor must be one whose position within the contractor’s organization is such that he or she has authority to speak for and to bind the corporation concerning the matters involved in the claim. By contrast, a regulation that stated that corporate vice-presidents could never certify a claim would not be consistent with the statute and therefore would not be valid — this regulation as construed by the panel does essentially that, and it is not.
The facts of this case demonstrate the unreasonableness of OMB’s regulation, at least as it is construed by the panel. The subject matter of the claim is whether certain dividend payments on stock awarded to the contractor’s employees are includa-ble elements in cost reimbursable contracts. The officer certifying the claim was the corporation’s Senior Vice President and Treasurer. Obviously, such an official would be among the most knowledgeable and responsible in assessing such a claim. Can it be said that the Congress had in mind that only the civil engineer who is the plant manager could certify the claim if the president of the company was busy doing other things? (What if there are a number of plants affected? What if there were a “Senior Vice President for Certifying CDA Claims”?) Or, if the manager at one of many plants of a large corporation was ill, can it be said that Congress intended to require that the CEO, located in corporate headquarters 2000 miles from the plant, personally certify a $55,000 claim on a $400 million contract?
The Board of Contract Appeals which heard this case considered the Senior Vice President a proper certifier on the grounds that he met the regulation's description of an officer having overall responsibility for the conduct of the contractor’s affairs, in this ease, financial affairs. The panel disagreed, concluding that the regulation means affairs in toto, i.e., the CEO. Either the panel or the regulation is wrong. In either ease, the rule announced by the panel should not be allowed to become a binding precedent of this court.
If the Government is genuinely in doubt about the authority of the certifier to bind the contractor, it is a simple matter for the Government to challenge this authority before the Board. It would be equally easy for the contractor to then verify that authority. But that is not what the Government seeks. The Government’s position instead sets a trap for the unwary, requiring that claims falling short of its technical trap be re-started, thus giving the Government more years to avoid paying its just debts, if they are ultimately found to be just, and to deny the contractor the interest on the money due that the statute requires be paid. The large defense and other contractors who regularly do business with the Government, and who have the legal resources to closely follow the arcane requirements laid down in this area, will find the certification process imposed by this decision onerous but manageable. It is the small companies who seldom do business with the Government and who can least afford delayed payments with no interest paid for the delay, who likely will be caught and most hurt by this construction of the regulation. This court should not countenance any such distortion of the remedial purposes of the Contracts Dispute Act.
Finally, the court lets pass an opportunity to correct what I consider a long-standing error, judicially created, regarding the jurisdiction of the boards and courts which hear these cases. The panel opinion holds that the failure to properly certify the claim deprives the Board, and therefore this court, of jurisdiction over the cause. But failure to properly certify a claim under the CDA does not speak to subject matter jurisdiction — it merely means that the particular claimant has failed to state a claim for which, under the terms of the statute, relief may be granted. Subject matter jurisdiction over CDA claims is determined by statute granting that jurisdiction to specified boards and courts. A party’s failure to do all that is required to certify a claim goes only to that party’s *584entitlement to relief. To confuse the two creates not only analytical difficulties, but practical ones as well. Admittedly, the panel is correct that the error is longstanding (see the discussion under Jurisdiction in the panel opinion), but that is no reason to continue its perpetuation since no investment expectations are likely to have been made in reliance on it. This whole area could benefit from a thorough reexamination by the court in banc.

. Under Fed.R.App. P. 35(a), a majority of the active judges of this court may, sua sponte, order a case to be reheard in banc. In this case, in response to a suggestion from several members of the court, a majority of the active judges ■ did not so order.

. See, e.g., Sun Cal, Inc. v. United States, 21 Cl.Ct. 31, 33-34 (1990) (finding a vice-president and chief financial officer qualified to certify); Westech Corp. v. United States, 20 Cl.Ct. 745, 751-53 (1990) (finding certification of claim by former employee of the contractor in combination with a subsequent ratification by the corporation president to be ineffective); Western Em*582pire Constructors, Inc. v. United States, 20 Cl.Ct. 668, 671 (1990) (finding a project manager to be a "senior company official in charge at the contractor’s plant”); Triax Co. v. United States, 20 Cl.Ct. 507, 510-14 (1990) (on reconsideration, an order finding a certification invalid where the senior company officials certifying were not also in charge of the plant was vacated); National Surety Corp. v. United States, 20 Cl.Ct. 407, 410-12 (1990) (finding certification by an officer of the parent- corporation to be ineffective); Al Johnson Constr. Co. v. United States, 19 Cl.Ct. 732, 736 (1990) (finding use of “a senior company official” rather than “the senior company official” in regulation to indicate that certification must be by "a senior official within the company, not just the most senior person on site.”)