Sergent's Mechanical Systems, Inc. v. United States

United States Court of Federal Claims·Decided November 29, 2021·No. 21-1685·Published

Opinion

In the United States Court of Federal Claims No. 21-1685C (Filed: November 29, 2021)

) SERGENT’S MECHANICAL ) SYSTEMS, INC. d/b/a SERGENT ) CONSTRUCTION, ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES, ) Defendant. ) )

Joel L. Hamner, Whitcomb, Selinsky, P.C., Denver, CO, for Plaintiff. With him on the briefs was Jonathan Perrone.

Michael D. Snyder, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for Defendant. With him on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Civil Division, Martin F. Hockey, Jr., Acting Director, and Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C.

ORDER SOLOMSON, Judge.

The issue before the Court is straightforward: whether the United States Court of Federal Claims can grant preliminary injunctive relief where Plaintiff asserts only a Contract Disputes Act (“CDA”)1 claim pursuant to 28 U.S.C. § 1491(a). The Court once again answers that question in the negative — and it is not a close call.

I. PROCEDURAL BACKGROUND

On August 12, 2021, Plaintiff, Sergent’s Mechanical Systems, Inc., d/b/a Sergent Construction (“SMSI”), filed a Complaint against Defendant, the United States, acting

1 Pub. L. No. 95-563, 92 Stat. 2383 (1978) (codified at 41 U.S.C. §§ 7101–7109).

1 by and through the United States Department of Veterans Affairs (“VA”). ECF No. 1 (“Compl.”). SMSI alleged that the VA improperly terminated SMSI’s contract for default. Id. ¶ 1, 2. The now-terminated contract was for “resolv[ing] certain heating, ventilation, and air conditioning (‘HVAC’) issues” at a VA center in Florida. Id. ¶ 15. The Complaint also alleged, inter alia, that the VA improperly failed to provide declaratory relief, changed the contract, and refused to pay SMSI “for work completed under the contract.” Id. ¶ 1. The Complaint cited the Tucker Act, 28 U.S.C. § 1491, as amended by the CDA, as the basis for the Court’s jurisdiction. Id. ¶ 12. SMSI filed an Amended Complaint on August 24, 2021, reiterating the same claims and the same jurisdictional basis for them (and reflecting apparently only minor corrections). ECF No. 12 (“Am. Compl.”). The Amended Complaint seeks primarily money damages, as well as declaratory relief unrelated to SMSI’s request for preliminary equitable relief. Id. at 19.

On the same day that SMSI filed its initial Complaint, SMSI filed a motion for a temporary restraining order and preliminary injunction. ECF No. 5 (“TRO-PI Motion”). SMSI requested that this Court enjoin the VA from: (1) “[e]xecuting a completion contract for any remaining” work under the terminated contract; (2) “authorizing the performance of any work” under any completion contract that “has already been executed”; and (3) “[n]oticing other federal procuring agencies, contracting officers, or other government officials of the contested termination for default . . . via the government’s various evaluation reporting tools[.]” Id. at 1–2. Although SMSI sought such preliminary relief pursuant to 28 U.S.C. § 1491(b)(2), ECF No. 6 at 18, neither SMSI’s initial Complaint nor its Amended Complaint mention 28 U.S.C. § 1491(b). See Compl.; Am. Compl.; TRO-PI Motion at 2 (“Concurrent with this motion, Sergent has filed a Complaint under [the] Contract Disputes Act of 1978[.]”).2

On August 16, 2021, the Court held a status conference to discuss the TRO-PI Motion. ECF No. 10; ECF No. 15 (“Tr.”). During that status conference, SMSI’s counsel conceded: (1) SMSI’s Complaint was limited to a CDA claim; (2) the TRO-PI Motion relied upon § 1491(b), but not § 1491(a); and (3) the TRO-PI Motion should have cited, but did not address, 28 U.S.C. § 1491(a).3

2Section 1491(b) of Title 28 of the United States Code provides an “interested party” with a cause of action to challenge an agency’s procurement-related decisions, commonly referred to as “bid protests.” Tolliver Grp., Inc. v. United States, 151 Fed. Cl. 70, 95–99 (2020) (discussing actions pursuant to 28 U.S.C. § 1491(b)). 3 See Tr. at 7:16–22 (“THE COURT: But you do agree that there is no 1491(b) claim here at all, correct? [PLAINTIFF]: Related to bids, Your Honor, no. THE COURT: Well, related to a procurement action. This is a pure CDA claim in your Complaint. Correct? [PLAINTIFF]: Yes, Your Honor.”); Tr. at 4:20—5:3 (“THE COURT: But your [TRO-PI] Motion only cites 1491(b). Is it your contention that I have injunctive relief authority under 1491(a)? [PLAINTIFF]: Yes, sir. Yes, Your Honor. THE COURT: So where is any citation to 1491(a) in your motion?

2 Following the status conference, the Court, on August 19, 2021, denied SMSI’s TRO-PI Motion because “the plain language of § 1491(a)(2) does not authorize this Court to issue injunctive relief in [monetary] CDA cases, and particularly not preliminary injunctive relief.” Sergent’s Mech. Sys., Inc. v. United States, -- Fed. Cl. --, 2021 WL 3672176, at *2 (Fed. Cl. Aug. 19, 2021).

On August 27, 2021, SMSI filed a motion requesting that this Court certify its denial of SMSI’s TRO-PI Motion for an interlocutory appeal to the United States Court of Appeals for the Federal Circuit, our appellate court. ECF No. 13-1, Plaintiff’s Memorandum in Support of Its Motion to Certify (“Pl. Mem.”). The government filed its response on September 10, 2021, arguing that SMSI’s motion to certify was “improper and unsupported by any source of relevant law.” ECF No. 16 at 1. In particular, the government pointed out that SMSI could have pursued an immediate interlocutory appeal because this Court’s order denied a request for injunctive relief. Id. at 2–3 & n.2 (citing 28 U.S.C. § 1292(a)(1), (c)(1), and Cont’l Serv. Grp., Inc. v. United States, 2017 WL 4926842, at *6 (Fed. Cl. Oct. 31, 2017)).

The Court agreed with the government; the law is clear that SMSI’s motion for certification was unnecessary. ECF No. 17. Nevertheless, the Court exercised its discretion to treat SMSI’s motion as one for reconsideration of this Court’s prior denial of SMSI’s TRO-PI Motion, pursuant to Rule 54(b) of the Rules of the United States Court of Federal Claims (“RCFC”). Id. (citing E&I Glob. Energy Servs., Inc. v. United States, 152 Fed. Cl. 524, 530–33 (2021)). This tolled the 60-day appeal deadline. ECF No. 17 (citing O’Connor v. United States, 392 F. App’x 861, 862 (Fed. Cir. 2010) (per curiam)). The Court ordered the government to respond to the merits of SMSI’s arguments regarding preliminary injunctive relief, ECF No. 17, and the government accordingly filed its response on September 28, 2021, ECF No. 18 (“Def. Resp.”). Plaintiff filed a reply on October 13, 2021. ECF No. 20 (“Pl. Reply”). Plaintiff’s motion for reconsideration is now fully briefed.

II. STANDARD OF REVIEW

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