Opinion
No. C-04-5428 MJJ.
April 13, 2005
ORDER DENYING DEFENDANT'S MOTION TO TRANSFER
INTRODUCTION
Before the Court is Defendant United States of America's ("Defendant" or the "Government") motion to transfer to the United States Court of Federal Claims for lack of subject matter jurisdiction. Plaintiff Patriot Contract Services opposes Defendant's motion. For the reasons set forth below, the Court DENIES Defendant's motion to transfer.
Plaintiff initially filed its lawsuit against the United States Navy Military Sealift Command, a division of the U.S. Department of Defense. Defendant filed a motion to dismiss, or in the alternative, to transfer. With respect to the motion to dismiss, Defendant argued that the sovereign immunity of agencies of the United States (as opposed to the United States itself) is not waived by the Suits in Admiralty Act. The Court agreed and granted that motion on March 28, 2005. The Court did not address Defendant's motion to transfer in that Order as the transfer issue was not yet ripe. On March 29, 2005, Plaintiff amended its complaint to name the United States of America as the defendant. Defendant's motion to transfer is now ripe.
FACTUAL BACKGROUND
For four years running, Plaintiff Patriot Contract Services ("Plaintiff or "Patriot") operated and maintained eleven Large Medium Speed Roll-On/Roll-Off ("LMSR") ships for the United States Navy Military Sealift Command ("MSC"). LMSR vessels are a key component of the surge sealift capacity of the United States armed forces. The operator of the LMSR ships must maintain the vessels and be prepared to mobilize a full crew to deploy in support of military missions throughout the world on short notice.
On December 11, 2003, MSC solicited bids for the worldwide operation and maintenance of its eleven LMSR ships. On August 31, 2004, MSC awarded the contract for the operation and maintenance of nine of those vessels to AMSEA. MSC contends that AMSEA's proposal represented the best overall value for the Government. Patriot filed a bid protest with the United States General Accountability Office ("GAO"). Before the GAO issued its final decision, Patriot withdrew its protest and filed the instant lawsuit.
Two of the eleven LMSRs are not relevant here as they were set aside for small business participation. At issue here is the operation and maintenance of only nine LMSRs.
On February 22, 2005, Plaintiff Patriot filed a motion for preliminary injunction, seeking to enjoin MSC from transitioning the operation of the LMSRs from Patriot to AMSEA. The same day, Defendant filed the instant motion to transfer the action to the U.S. Court of Federal Claims.
Oral argument on Plaintiff's preliminary injunction motion will be heard on April 26, 2005 at 9:30 am in Courtroom 11.
LEGAL STANDARD
A federal court must have jurisdiction over the subject matter of a suit in order for the action to proceed. See FED. R. CIV. P. 12(b)(1). A motion to dismiss under Rule 12(b)(1) challenges the court's subject matter jurisdiction and the plaintiff bears the burden of proof that federal jurisdiction exists. Thornhill Publishing Co. v. General Telephone Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979). Pursuant to 28 U.S.C. § 1631, where a court finds that it lacks subject matter jurisdiction over a case, it must transfer the case to "any other such court in which the action or appeal could have been brought at the time it was filed or noticed." 28 U.S.C. § 1631.
ANALYSIS
Defendant moves to transfer Plaintiff's lawsuit to the U.S. Court of Federal Claims pursuant to 28 U.S.C. § 1631. Defendant argues that only the Court of Federal Claims has jurisdiction over bid protest actions, such as this one, concerning awards of Government contracts. Defendant additionally argues that Plaintiff's action does not contemplate a maritime contract cognizable in admiralty and that as such, the SAA, the only jurisdictional hook into this, an Article III, Court, is not implicated. The Court addresses each of these arguments separately.
A. Federal District Courts Have Jurisdiction Over Maritime Bid-Protest Actions
Defendant contends that federal district courts once had jurisdiction, pursuant to the Administrative Dispute Resolution Act ("ADRA"), over bid protests such as this one, but that such jurisdiction terminated more than four years ago. Plaintiff argues that the ADRA does not bear on bid protest actions relating to maritime contracts and that this Court has jurisdiction over such actions pursuant to the Suits in Admiralty Act. The Court agrees with Plaintiff.
The Tucker Act, 28 U.S.C. § 1491, confers on the U.S. Court of Federal Claims, formerly known as the Court of Claims, exclusive jurisdiction over claims for damages exceeding $10,000 that are "founded . . . upon any express or implied contract with the United States." 28 U.S.C. § 1491(a)(1). The Court of Federal Claims is a non-Article III court. The ADRA, 28 U.S.C. § 1491(b)(1), codified the temporary concurrent jurisdiction of the federal district courts and the Court of Federal Claims over bid protests in Government contracts. The ADRA contained a "Sunset Provision," codified as 28 U.S.C. § 1491(d), which terminated federal district court jurisdiction over bid protest cases as of January 1, 2001, thereby vesting exclusive jurisdiction over such cases to the Court of Federal Claims.
The Sunset Provision provided, "The jurisdiction of the district courts of the United States over the actions described in section 1491(b)(1) of title 28, United States Code (as amended by subsection (a) of this section) shall terminate on January 1, 2001 unless extended by Congress." Congress did not extend jurisdiction.
Separate and apart from the Tucker Act and the ADRA, the Suits in Admiralty Act ("SAA") confers exclusive jurisdiction in the federal district courts over suits against the United States arising from, inter alia, maritime contracts. 46 U.S.C. Appx. §§ 741, et seq. Indeed, "[t]here is a long history of exclusive jurisdiction over maritime contract matters in the district courts." Asta Eng'g v. United States, 46 Fed. Cl. 674, 675-76 (Fed.Cl. 2000). The debate here is which court — the federal district courts or the Court of Federal Claims — has jurisdiction over a bid protest relating to a maritime contract. That is, does the SAA apply here or does the ADRA and its Sunset Provision?
According to Defendant, the instant lawsuit is the very type of bid protest contemplated by the ADRA and because Congress never extended federal district court jurisdiction over such cases, the Sunset Provision took effect and the Court of Federal Claims now has exclusive jurisdiction here. According to Plaintiff, because of the existence of the SAA, the ADRA applied only to non-maritime bid protest actions and the ADRA's Sunset Provision, while it does terminate district court jurisdiction over non-maritime bid protest cases, does not act to terminate district court jurisdiction over maritime bid protest cases such as the one at bar. Plaintiff is right.
The Court of Federal Claims has held that the SAA "largely displaces" Tucker Act jurisdiction of the Court of Federal Claims with respect to maritime contract claims involving the United States. Burger v. United States, 29 Fed. Cl. 10 (Fed.Cl. 2001) (citing United States v. United Continental Tuna Corp., 425 U.S. 164, 179 (1976)). That is, the district courts have always had, and the Court of Federal Claims has never had, jurisdiction over maritime matters involving the federal government. Asta Eng'g, 46 Fed. Cl. at 675-76; Bay Ship Mgmt. Inc. v. United States, 43 Fed. Cl. 535, 536-37 (Fed.Cl. 1999). In Asta Engineering, a case very similar to the one at bar, the Court of Federal Claims considered the precise jurisdictional question presently before this Court and held that the ADRA, which amended the Court of Federal Claims' Tucker Act jurisdiction, was not intended to "vary this longstanding exclusive relegation of maritime contract matters involving the United States to the district courts." 46 Fed. Cl. at 675-76. The ADRA is "silent on the matter of admiralty jurisdiction" and when Congress intends to confer jurisdiction on the Court of Federal Claims, "it does so expressly." Id. Thus, as the Court of Federal Claims held in Asta Engineering, Congress's enactment of the ADRA did not effect the district courts' jurisdiction over maritime contract (or other admiralty) actions. "In short, absent specific legislation granting the United States Court of Federal Claims admiralty jurisdiction covering bid protests on maritime contracts, jurisdiction over [such matters] is lacking." Id. at 677.
Defendant contends that the Federal Circuit's holding in Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071 (Fed. Cir. 2001), suggests otherwise. Defendant argues that the Emery Worldwide case stands for the proposition that the ADRA was broad enough to sweep even maritime contract bid protest claims into the jurisdiction of the Court of Federal Claims and out of the jurisdiction of the federal district courts. However, that case does not address bid protest claims brought under the jurisdiction granted by the SAA because the bid protest at issue there was not related to a maritime contract. Therefore, Emery Worldwide is not dispositive of the jurisdictional question before the Court.
Defendant also argues that the Court of Federal Claims simply got it wrong in Asta Engineering and Bay Ship Management when it held that the ADRA and its Sunset Provision had no impact on federal district courts' jurisdiction over bid protest actions on maritime contracts. Defendant contends that this is exemplified by the fact that "bid protest cases related to subsequent maritime contracts continue to be tried in the Court of Federal Claims." (Motion at 13:15-14:1 (citing, inter alia, Great Lakes Dredge Dock Co., 60 Fed. Cl. 350 (2004); Norfolk Dredging Co., Inc. v. United States, et al., 58 Fed. Cl. 741 (2003)).) The very same argument was raised in Bay Ship Management and the court held that because those cases "either did not involve maritime contracts, or did not address the jurisdictional quandary resolved in the case at bar," the argument was without merit. 43 Fed. Cl. at 537 n. 6. Here too, as Plaintiff points out, none of the harbor-dredging cases string-cited by Defendant expressly deals with a maritime contract or contemplates the jurisdictional question at issue here (or any jurisdictional question at all, for that matter). That is, none of the cases cited by Defendant addresses the SAA's impact on the Court of Federal Claims' jurisdiction over maritime bid protests. But in every case that does squarely address the jurisdictional question regarding bid protests relating to maritime contracts involving the United States, the Court of Federal Claims has held that it does not have jurisdiction. See Asta Eng'g, 46 Fed. Cl. 674; Bay Ship Mgmt., 43 Fed. Cl. 535.
In essence, Defendant urges the Court to depart from longstanding Court of Federal Claims jurisprudence on the topic, exemplified by the Asta Engineering and Bay Ship Management cases discussed supra, as well as from the Court's own recent holding on this very issue in Puglia v. United States Coast Guard, 2005 WL 106785 (N.D. Cal., January 18, 2005). The Court declines to do so. Accordingly, the Court finds that pursuant to the SAA, it has jurisdiction over bid protests relating to maritime contracts involving the United States and that the ADRA and its Sunset Provision do not bear on that jurisdictional question.
B. Plaintiff's Bid-Protest Claim Is An Admiralty Action
Defendant argues that the instant bid protest does not fall under the SAA because it is not a traditional maritime claim since there is no maritime contract between Patriot and Defendant. As such, Defendant argues, the SAA, and the jurisdictional hook it provides, is not available to Plaintiff. Defendant contends that the bid solicitation at issue here is, at best, an implied-in-fact non-maritime contract between Plaintiff and Defendant and that, under the preliminary contract doctrine, the implied contract is not maritime in nature. Defendant further argues that even if the preliminary contract doctrine is inapplicable, the claim would still not be an action in admiralty under the Exxon nature-and-subject-matter approach. Finally, Defendant contends that the "non-severable and non-maritime provisions" of the implied contract render it non-maritime. The Court disagrees.
Defendant again urges the Court to deviate from Court of Federal Claims jurisprudence directly on point. That court has itself ruled that disputes, like this one, brought by disappointed bidders against the United States on government maritime contracts constitute maritime contract actions and therefore fall within the scope of the SAA. Asta Eng'g, 46 Fed. Cl. at 675-76; Bay Ship Mgmt., 43 Fed. Cl. at 536-37. The fact that the underlying contract in the dispute is maritime in nature is enough to subsume the case under the SAA and vest jurisdiction in the district courts exclusively, even if the plaintiff is not a party to that ultimate maritime contract. See Bay Ship Mgmt., 43 Fed. Cl. at 537. In Asta Engineering, the defendant argued, as Defendant does here, "that the contract actually in issue is an implied contract to consider a bid fairly and honestly which . . . is not maritime in nature." 46 Fed. Cl. at 675-76. The court held that such an implied-in-fact contract "cannot be divorced from the procurements which are maritime in nature . . . because what plaintiff is contesting in this action is the award of a contract . . . for services to be performed in support of naval ships." Id. Such an action, the court held, is "maritime in nature." Id. The same is true here.
Defendant contends that the Court of Federal Claims got it wrong in Asta Engineering and Bay Ship Management. But the Court is not persuaded by Defendant's creative arguments. Having read and considered Defendant's argument that Plaintiff's claim is not maritime in nature because of the preliminary contract doctrine or the `nature and subject matter approach' announced in Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 612 (1991), the Court finds that Plaintiff's claim is maritime. The Court finds, as the Court of Federal Claims did in Asta Engineering, that the bid solicitation and bid proposal are not severable from the maritime contract that MSC ultimately entered into with AMSEA. An implied-in-fact contract for fair consideration under a bidding solicitation for a maritime contract "cannot be divorced from the procurements which are maritime in nature . . . because what the plaintiff is contesting . . . is the award of a contract . . . for services to be performed in support of naval ships." Asta Engineering, 46 Fed. Cl. at 675-76. Plaintiff's claim is maritime, the SAA applies, and this Court has subject matter jurisdiction.
CONCLUSION
For the foregoing reasons, the Court DENIES Defendant's motion to transfer the action to the Court of Federal Claims as this Court has jurisdiction over bid protests on maritime contracts pursuant to the Suits in Admiralty Act.
IT IS SO ORDERED.