Hamilton Securities Advisory Services, Inc. v. United States

60 Fed. Cl. 161, 2004 U.S. Claims LEXIS 58, 2004 WL 605206
Procedural entryThis page is a short order in Hamilton Securities Advisory Services, Inc. v. United States. Read the opinion of the Court — 60 Fed. Cl. 144
United States Court of Federal Claims·Decided March 25, 2004·No. No. 98-169C·Published

Opinion

MEMORANDUM OPINION

BRADEN, Judge.

For the past decade, Hamilton Securities Advisory Services, Inc. (“Hamilton”), the plaintiff in this case, and Ervin and Associates, Inc. (“Ervin”), a proposed intervenor, have been rivals for a number of multi-mil[162]*162lion dollar contracts awarded by the Department of Housing and Urban Development. See Ervin and Assocs. v. United States, 59 Fed.Cl. 267, 276-77, 279, 286 (2004). Ervin now seeks status as an intervenor in this case.

FACTUAL AND PROCEDURAL BACKGROUND1

1. Proceedings In The United States District Court For The District Of Columbia.

On June 6, 1996, Ervin initiated a qui tam action2 in the United States District Court for the District of Columbia under the False Claims Act, 31 U.S.C. § 3729 et seq. (“False Claims Act”), alleging that Hamilton was engaged in fraudulent activity that adversely impacted a series of HUD assets sales conducted by auction. See United States ex rel. Ervin and Assocs., Inc. v. Hamilton Securities Group, Inc., 298 F.Supp.2d 91 (D.D.C. 2004). The United States (“the Government”) declined to intervene in Ervin’s qui tam action. In large part, the predicate acts in the qui tam action are essentially the same as the above captioned breach of contract case before the court.

On May 15, 2001, Ervin also filed an Alternative Remedy Case (“ARC”)3 in the United States District Court for the District of Columbia, alleging that the Government’s counterclaim in the breach of contract ease filed by Hamilton in the United States Court of Federal Claims, in effect, was a maneuver to circumvent the qui tam action. See Ervin and Assocs., Inc. v. United States, No. 01-1052 (D.D.C. Aug. 14, 2003) (memorandum opinion and order). In that action, Ervin filed a motion for an injunction and declaratory judgment that the Government’s counterclaim in the breach of contract case in this court was an “alternate remedy,” under the False Claims Act, which, if successful, would allow Ervin to share in any monetary recovery. Id. at 2-3. Ervin also requested the United States District Court for the District of Columbia to stay this case to prevent the entry of any final judgment that arguably would have a preclusive effect in the qui tam action. Id. at 3. On August 14, 2003, the United States District Court for the District of Columbia dismissed Ervin’s ARC action holding, as a matter of law, that the Government’s breach of contract counterclaim in this court was not an “alternate remedy.” Id. at 14. On September 10, 2003, Ervin filed a notice of appeal of that judgment in the United States Court of Appeals for the D.C. Circuit. The United States Court of Appeals for the D.C. Circuit has extended the Government’s time to file a motion for summary affirmance until April 26, 2004.

2. Proceedings In The United States Court Of Federal Claims.

On January 16, 2004, Ervin filed a motion to intervene in this case, pursuant to RCFC [163]*16324, and for a stay pending the entry of a final judgment in the qui tam action by the United States District Court for the District of Columbia. On January 20, 2004, the court set a trial in the above captioned breach of contract case in the United States Court of Federal Claims to start on April 14, 2004. By agreement of the parties, that date has been extended to April 19,2004.

DISCUSSION

1. Jurisdiction.

The court has subject matter jurisdiction over actions for monetary relief against the United States, pursuant to the Tucker Act’s waiver of sovereign immunity. See 28 U.S.C. § 1491(a)(1). Such actions include “contracts with the United States, actions to recover illegal exactions of money by the United States, and actions brought pursuant to money-mandating constitutional provisions, statutes, regulations or executive orders.” Martinez v. United States, 333 F.3d 1295, 1302-03 (Fed.Cir.2003). As the United States Court of Appeals for the Federal Circuit held in LeBlanc v. United States, 50 F.3d 1025 (Fed.Cir.1995):

The Tucker Act confers jurisdiction on the Court of Federal Claims, and a corresponding waiver of the government’s sovereign immunity from suit, when the constitutional provision, statute, or regulation in question expressly creates a substantive right enforceable against the federal government for money damages.

Id. at 1028 (citing United States v. Testan, 424 U.S. 392, 398, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976)).

2. Standard Of Review.

RCFC 24 provides two bases for intervention by a third party: intervention of right and permissive intervention.

RCFC(a)(2) provides:

(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

RCFC 24(a)(2).

RCFC 24(b)(2) states:

(b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action: ... (2) when an applicant’s claim or defense and the main action have a question of law or fact in common. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

RCFC 24(b)(2).

3. Resolution Of Motion To Intervene And For Stay.

Ervin seeks to intervene in this case under both provisions of RCFC 24 alleging that its interests are not protected by the parties. See Ervin Mot. at 2, 7-11. Ervin contends, as a relator in a qui tam action before the United States District Court for the District of Columbia, that it has a right under 31 U.S.C. § 3730(d) “to share in any recovery against Hamilton or its insurance carrier.” Id. at 2. Accordingly, Ervin seeks to intervene and stay the proceedings in this case “to avoid the possibility of a decision by this Court inconsistent with any present or future decision of the district court in the qui tam case. In addition, the outcome of the qui tam ease may render further proceedings in this Court moot.” Id. Ervin further advises the court that a “final judgment [that Ervin met its burden to prove that Hamilton fraudulently induced award of HUD Contract No.

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Hamilton Securities Advisory Services, Inc. v. United States, 60 Fed. Cl. 161, 2004 U.S. Claims LEXIS 58, 2004 WL 605206 (uscfc 2004).

60 Fed. Cl. 161 (Hamilton Securities Advisory Services, Inc. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

United States v. Testan
424 U.S. 392 (Supreme Court, 1976)
Roland A. Leblanc v. United States
50 F.3d 1025 (Federal Circuit, 1995)
Gabriel J. Martinez v. United States
333 F.3d 1295 (Federal Circuit, 2003)
Ervin & Associates, Inc. v. United States
59 Fed. Cl. 267 (Federal Claims, 2004)