AETC II PRIVATIZED HOUSING, LLC v. United States

CourtUnited States Court of Federal Claims
DecidedMay 15, 2025
Docket22-345
StatusPublished

This text of AETC II PRIVATIZED HOUSING, LLC v. United States (AETC II PRIVATIZED HOUSING, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AETC II PRIVATIZED HOUSING, LLC v. United States, (uscfc 2025).

Opinion

In the United States Court of Federal Claims

AETC II PRIVATIZED HOUSING, LLC, et al., Nos. 22-345C; 22-346C; 22-348C; 22-349C; 22-350C; 22-351C; 22-352C; 22-353C; Plaintiffs, 22-354C; 22-355C; 22-356C; 22-357C; 22- 358C; 22-359C; 22-360C; 22-361C; v. 22-362C; 22-363C

THE UNITED STATES, (Filed: May 15, 2025)

Defendant.

David R. Johnson, Vinson & Elkins, LLP, Washington, D.C., for Plaintiffs. With him on the briefs were Tyler E. Robinson, Michael McCambridge, and Leslie Edelstein, Vinson & Elkins, LLP.

Amanda L. Tantum, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for Defendant. With her on the briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Elizabeth M. Hosford, Assistant Director.

OPINION AND ORDER

Meriweather, Judge.

This dispute arises from contracts between the United States Navy and Plaintiffs— specifically Ohana Military Communities, LLC, and Hawaii Military Communities, LLC—to provide housing for Navy servicemembers and their dependents in Hawaii. Specially, Plaintiffs in this consolidated case allege that the United States breached certain contractual agreements by reducing the servicemembers’ monthly housing stipend, which in turn reduced the rent that Plaintiffs could charge.

Before the Court is Plaintiffs’ Motion to Compel Responses to Requests for Admission (“Motion”), filed in Ohana Military Communities, LLC et al., No. 22-cv-359 (“Ohana”), one of 18 consolidated cases under the lead case AETC II Privatized Housing, LLC et al., No. 22-cv- 345 (“AETC II”). See Pls.’ Mot. to Compel Resps. to Reqs. for Admis. (“Mot.”), AETC II ECF No. 82; Ohana, ECF No. 30. The parties in Ohana are conducting discovery in anticipation of summary judgment briefing that will proceed separately from the remaining 17 consolidated cases. See Order, AETC II ECF No. 61; Ohana ECF No. 25. Plaintiffs argue that the United States’ objections to 16 of their requests for admission (“RFA”) are inconsistent with this Court’s rules and request that the Court compel a response. See Mot. at 1–2. The United States contends that certain RFAs inappropriately seek admissions or denials to legal conclusions, interpretations of statutes, or ultimate issues in dispute. See Def.’s Resp. to Mot. to Compel (“Resp.”), AETC II, ECF No. 83; Ohana ECF No. 31. Having reviewed the parties’ briefs1 and the relevant law, and for the reasons explained below, the Court GRANTS Plaintiffs’ Motion to Compel Responses to Requests for Admission.

BACKGROUND

The Military Housing Privatization Initiative (“MHPI”), established in 1996, is a Department of Defense (“DoD”) program with the mission to improve military housing around the country. See Compl. ¶¶ 24–25. Under the MHPI, the United States and Plaintiffs entered a series of contracts (collectively “the contracts”)—including a Ground Lease and LLC Operating Agreement—to manage, rebuild, and maintain Navy servicemembers’ housing in Hawaii (the “Project”). See id. ¶¶ 4, 41. The contracts require Plaintiffs to set rent rates in accordance with those servicemembers’ Basic Allowance for Housing (“BAH”), their monthly housing stipend. See id. ¶¶ 3, 32, 53. The solicitation for the Project indicated that rent collected “shall equal the BAH for the pay grade designated to certain units.” Compl., Ex. 1 at *65, ECF No. 1-1. Under the National Defense Authorization Act (“NDAA”) of 2015, Congress granted the Secretary of Defense discretion to implement annual, percentage-based reductions in the BAH. See Compl. ¶ 69; Pub. L. No. 113-291, tit. VI, § 604(a), 128 Stat. 3292, 3398–99 (2014) (codified at 37 U.S.C. § 403) [hereinafter BAH statute]. Generally, the Secretary has used this discretion to annually reduce servicemembers’ BAH. See Compl. ¶ 70.

On March 30, 2022, Plaintiffs filed their Complaints in 18 related MHPI cases. On April 15, 2022, the Court consolidated the MHPI cases under lead case AETC II. See Order, AETC II ECF No. 11; Ohana ECF No. 11. On July 13, 2022, the United States filed an omnibus Motion to Dismiss pursuant to Rule 12(b)(6), arguing that Plaintiffs cannot establish that the contracts entitled them to an increase in tenant rent. See Mot. to Dismiss, AETC II ECF No. 22 (sealed). On June 7, 2024, the Court denied the United States’ Motion to Dismiss the consolidated cases. See Order, AETC II ECF No. 46; Ohana ECF No. 18. The Court directed the parties to submit a case inventory listing relevant legal and factual issues, documentation presently found on the record, and whether discovery is necessary in each case. See id. at 1–2. The Court also ordered the parties to submit a Joint Status Report proposing the next steps for proceeding with this litigation. See id. at 2. On August 1, 2024, the Court issued an Order dividing the consolidated cases and another related case into three groups for case management purposes as follows: (1) Aurora et al. (21-cv-2182),2 (2) Ohana, and (3) all remaining consolidated cases under AETC II. See Order, AETC II ECF No. 61; Ohana ECF No. 25. The Court also ordered the United States

1 This opinion is based on the following filings: Compl., Ohana ECF No.1; Mot., AETC II ECF No. 82, Ohana ECF No. 30; Resp., AETC II ECF No. 83, Ohana ECF No. 31; Pl.’s Reply, AETC II ECF No. 84, Ohana ECF No. 32 (“Reply”). Throughout, page citations to documents in the record refer to the document’s original pagination, unless the page is designated with an asterisk (e.g., *1), in which case the reference is to the pagination assigned by PACER/ECF. 2 Aurora et al. is a separate but related case involving MHPI contracts that is proceeding independently and in parallel to AETC II.

2 to file an Answer in each of the consolidated cases and ordered the parties to submit proposed discovery schedules. Id. at 1–2.

The Court adopted the Ohana parties’ proposed deadline for the conclusion of fact discovery concerning liability issues. See Ohana J. Status R., ECF No. 27; Ohana Order, ECF No. 28. A discovery dispute subsequently arose, and Plaintiffs filed the present Motion requesting that the Court compel the United States’ response to specific, disputed RFAs. See Mot. The Motion is fully briefed, and the Court held a hearing to discuss the parties’ respective positions. See Resp.; Reply; Minute Entry (Mar. 5, 2025).

LEGAL STANDARDS

A. Standard of Review for Discovery Disputes

The Court “has wide discretion in setting the limits of discovery.” Schism v. United States, 316 F.3d 1259, 1300 (Fed. Cir. 2002) (quoting Moore v. Armour Pharm. Co., 927 F.2d 1194, 1197 (11th Cir. 1991)); accord White Mountain Apache Tribe of Ariz. v. United States, 4 Cl. Ct. 575, 583 (1984) (“It is axiomatic that a trial court has broad discretion to fashion discovery orders . . . .”). “Although discovery rules are to be accorded a broad and liberal treatment, the court must, in deciding either to compel or quash discovery, balance potentially conflicting goals.” Lakeland Partners, L.L.C. v. United States, 88 Fed. Cl. 124, 130 (2009) (cleaned up). Courts exercise an “extraordinarily broad range of discretion” when determining the appropriateness of Rule 36 requests, and even “on virtually identical facts, two decision makers can arrive at opposite conclusions, both of which constitute appropriate exercises of discretion.” Sommerfield v. City of Chicago, 251 F.R.D. 353, 355 (N.D. Ill. 2008) (collecting cases).

B. Requests for Admission (Rule 36)

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