Xp Vehicles, Inc. v. United States

121 Fed. Cl. 770, 2015 U.S. Claims LEXIS 711, 2015 WL 3543629
CourtUnited States Court of Federal Claims
DecidedJune 5, 2015
Docket12-774C
StatusPublished
Cited by18 cases

This text of 121 Fed. Cl. 770 (Xp Vehicles, Inc. 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
Xp Vehicles, Inc. v. United States, 121 Fed. Cl. 770, 2015 U.S. Claims LEXIS 711, 2015 WL 3543629 (uscfc 2015).

Opinion

RCFC 12(b)(1); RCFC 12(b)(6); Motion to Dismiss; Subject Matter Jurisdiction; Failure to State a Claim; Loan Program; Loan Guarantee Program; Implied-in-Fact Contract; Duty of Good Faith and Fair Dealing; Implied Duty to Fairly Consider; Oral Assurances; Promissory Estoppel; Equitable Estop-pel

OPINION AND ORDER

SWEENEY, Judge

Plaintiffs, XP Vehicles, Inc. (“XPV”), an advanced technology vehicle company, and Limnia, Inc. (“Limnia”), an advanced technology energy system company, are Silicon Valley-based innovative “green technology” sister companies that develop and produce advanced technology vehicles. Plaintiffs allege that they each applied for a loan to the Advanced Technology Vehicle Manufacturing Loan Program (“ATVM loan program”), which' is administered by the United States Department of Energy (“DOE”). In addition, Limnia alleges that it applied for a loan guarantee to the Section 1703 Loan Guarantee Program (“Section 1703 LGP”), which is also administered by the DOE. According to plaintiffs, their respective meritorious applications ultimately were denied because of corrupt political influence. Thus, plaintiffs contend, the DOE did not review their applications in good faith and in accordance with DOE regulations, policies, and promises, thereby breaching the parties’ implied-in-fact contracts, and violating the DOE’s duty of good faith and fair dealing. Plaintiffs also argue that promissory estoppel provides another basis for their entitlement to money damages against the United States. Defendant moves to dismiss plaintiffs’ second amended complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”). For the reasons set forth below, the court grants defendant’s motion.

I. BACKGROUND

A. ATVM Loan Program

This case concerns plaintiffs’ respective applications to the ATVM loan program and Limnia’s application for a loan guarantee to the Section 1703 LGP. 1 The ATVM loan program was created by the Energy Independence and Security Act of 2007 (“EISA”), codified at 42 U.S.C. § 17013, to move the United States towards greater energy independence and security, among other goals. Pub.L. No. 110-140, 121 Stat. 1492. At the time that plaintiffs applied for ATVM loans, the DOE administered the program through Steven Chu, United States Secretary of Energy (“Secretary”); Lachlan Seward, Director of the Advanced Technologies Manufacturing Loan Program; and their respective staff, advisors, and consultants. The pertinent portion of the EISA sets forth that

[t]he Secretary shall provide facility funding awards ... to automobile manufacturers, ultra efficient vehicle manufacturers, and component suppliers to pay not more than 30 percent of the cost of—
(1) reequipping, expanding, or establishing a manufacturing facility in the United States to produce—
(A) qualifying advanced technology vehicles;
(B) qualifying components; or
(C) ultra efficient vehicles; and
(2) engineering integration performed in the United States of qualifying vehicles, ultra efficient vehicles, and qualifying components.

42 U.S.C. § 17013(b). The EISA further states that the “Secretary shall carry out a program to provide a total of not more than *775 $25[ billion] in loans to eligible individuals and entities (as determined by the Secretary) for the costs of [such] activities described” above. Id. § 17013(d)(1). The Secretary must select

eligible projects to receive loans ... in cases in which, as determined by the Secretary, the award recipient (A) is financially viable without the receipt of additional Federal funding associated with the proposed project; (B) will provide sufficient information ... for the Secretary to ensure that the qualified investment is expended efficiently and effectively; and (C) has met such other criteria as may be established and published by the Secretary.

Id. § 17013(d)(3).

B. XPV’s ATVM Loan Program Application

On November 10, 2008, XPV applied for $40 million in ATVM loan program funds in order to mass produce an advanced technology, family-friendly SUV-style vehicle. XPV’s operations included potential manufacturing facilities located in Michigan, California, Nevada, and -Utah. XPV’s team consisted of highly experienced industry sales executives, managers, designers, and aerospace industry professionals. They designed XPV’s vehicle to be affordable; to have a virtually unlimited range without requiring gasoline, a garage, or electrical cords for battery recharge; to have the ability to recharge rapidly; to be produced quickly and cheaply; and to be easily repaired. One of XPV’s key innovations was the use of polymer plastics and skinned, expanded foam pressure membranes to replace metal doors, body panels, hoods, and roofs on a lightweight alloy frame. This design provided for a curb weight of less than 1,400 pounds, which, in addition to contributing to the vehicle’s virtually unlimited range, was a “key innovation” in improving vehicle safety because the polymer membranes functioned as a wraparound, predeployed airbag. 2d Am. Compl. ¶ 16. The vehicle’s parts that were critical for performance had either been tested or used in industry-proven “off-the-shelf’ applications, such as military applications, aerospace systems, and naval and homeland security deployments. Id. ¶ 17. At the time that it submitted its loan application, XPV was in discussions with private sources of capital, pending customers, and financial partners, and was preparing to commence production and sales.

The DOE stated that it would evaluate ATVM loan program applications on a “first in, first out” basis, treat all applicants fairly, and use objective published criteria when reviewing applications. Id. ¶ 19. In addition, the DOE promised to make funds available to qualified applicants as early as the end of December 2008, but by no later than January 2009. On December 2, 2008, the DOE acknowledged receipt of XPV’s application and requested additional information regarding the projected market use of XPV’s vehicle. 2d Am. Compl., Ex. 1 at 2. XPV provided this information, and on December 31, 2008, its application was deemed substantially complete. XPV’s application was among the first to be considered substantially complete by the DOE. A representative from the DOE said that it would request additional information from XPV as needed.

The DOE’s Microsoft Excel comparison matrices dated December 29, 2008, and March 2, 2009, placed XPV in the top five percent of all applicants. Based on the DOE’s representations, XPV believed that the-review process would take only weeks to be completed. When the process exceeded that time frame, XPV repeatedly offered the DOE additional engineering material, financial material, and other information to aid and expedite the DOE’s review and approval of XPV’s application.

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Cite This Page — Counsel Stack

Bluebook (online)
121 Fed. Cl. 770, 2015 U.S. Claims LEXIS 711, 2015 WL 3543629, Counsel Stack Legal Research, https://law.counselstack.com/opinion/xp-vehicles-inc-v-united-states-uscfc-2015.