United Aeronautical Corporation v. United States Air Force

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8 United States District Court

9 Central District of California

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11 UNITED AERONAUTICAL Case № 2:20-CV-01985-ODW (JDEx)

CORPORATION et al.,

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Plaintiffs, ORDER GRANTING MOTION TO

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v. DISMISS [13]

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UNITED STATES AIR FORCE et al.,

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Defendants.

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18 I. INTRODUCTION

19 This action arises from a dispute involving proprietary intellectual property

20 between Plaintiffs United Aeronautical Corporation (“UAC”) and Blue Aerospace,

21 LLC (“Blue Aero”) (collectively “Plaintiffs”) and Defendants United States Air Force

22 and United States Air National Guard (“ANG”) (collectively “Defendants”).

23 Defendants move to dismiss for lack of subject matter jurisdiction. (Mot. to Dismiss

24 (“Motion” or “Mot.”), ECF No. 13.) The matter is fully briefed. (See Opp’n to Mot.

25 (“Opp’n”), ECF No. 16; Reply ISO Mot. (“Reply”), ECF No. 17.) For the reasons

26 below, the Court GRANTS the Motion.1

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28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the

matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.

1 II. BACKGROUND

2 The Mobile Airborne Fire Fighting System (“MAFFS”) is a roll-on, roll-off

3 mobile fire-retardant tank system designed for use in aerial firefighting. (Compl. ¶ 24,

4 ECF No. 1.) In April 2000, manufacturer Aero Union entered into a contract (the

5 “2000 Contract”) with the United States Forest Service for the purpose of “designing,

6 developing, fabricating, and verifying a new prototype” MAFFS II and manufacturing

7 eight new MAFFS systems. (Id. ¶ 27.) The eight MAFFS II units are currently

8 deployed in a joint program between the Forest Service, Air Force Reserve, and Air

9 Force/ANG. (Id. ¶ 26.) The Forest Service is responsible for the maintenance,

10 storage, and operation of the MAFFS II units, while the Air Force Reserve and ANG

11 provide the aircraft, flight crews, maintenance, and support personnel to fly the

12 missions. (Id.) Pursuant to the 2000 Contract, Aero Union owned the MAFFS II data

13 rights, patents, and other intellectual property developed under the program, subject to

14 the Forest Service’s use rights derived from the 2000 Contract. (Id. ¶¶ 27, 30.) Over

15 the years, Aero Union and the Forest Service executed numerous modifications to the

16 2000 Contract, the last of which required Aero Union to deliver a data package to the

17 Forest Service for spare parts procurement, maintenance, and operations purposes.

18 (Id. ¶ 28.)

19 Aero Union ceased business operations in 2012, and, through a foreclosure sale

20 in 2013, UAC obtained certain of Aero Union’s assets and property. (Id. ¶ 29; id.

21 Ex. 1 (“Data Rights Agreement” or “DRA”) at 1, ECF No. 1-1.) As relevant here,

22 UAC obtained title to the intellectual property related to the MAFFS systems,

23 “including inventions; patents and patent applications; trademarks; data rights; and all

24 other relevant IP relating to the systems.” (Id. ¶ 29.) Presently, UAC and Blue Aero

25 are in a joint venture to develop, market, and sell the MAFFS systems. (Id. ¶ 14.)

26 In June 2014, pursuant to the final contract modification requiring delivery of a

27 data package, UAC and the Forest Service executed a Data Rights Agreement for

28 delivery of a hard drive containing a copy of the MAFFS II system proprietary data to

1 the Forest Service. (Id. ¶ 31.) Under the agreement, UAC and the Forest Service each

2 acknowledged and agreed that:

3 [A]s set forth in [the 2000 Contract], the technical data produced or

specifically used or related to the [MAFFS II] developed pursuant to such

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contract shall remain the property of UAC (as the purchaser of assets of

5 Aero [Union] from its secured creditor, including the System) and [the

Forest Service] shall have unlimited rights to view and use the data

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required for the continued operation and maintenance of the [MAFFS II]

7 product.

8 (DRA 2.) Plaintiffs contend this agreement granted the Forest Service only limited

9 use rights. (Compl. ¶¶ 30–31.) Plaintiffs allege the Forest Service conveyed the hard

10 drive to ANG and that ANG also had full knowledge of the limited rights. (Id. ¶ 33.)

11 From January 2014, ANG has funded, and is currently funding, a program to

12 upgrade and replace the MAFFS II systems with a derivative product called

13 “iMAFFS.” (Id. ¶ 32.) This program is managed by Redstone Defense Systems. (Id.)

14 In or about July or August 2014, ANG turned the MAFFS II proprietary data over to

15 Redstone Defense Systems to develop the iMAFFS. (Id. ¶ 33.) Beginning in

16 November 2014, Plaintiffs levied a series of increasingly formal objections to ANG’s

17 use of the MAFFS II proprietary data. (Id. ¶¶ 35–37.) ANG rejected those objections

18 and determined that the United States government either co-owned the data rights with

19 Plaintiffs or had broad “government purpose” rights to use the data. (Id. ¶ 38.)

20 Plaintiffs alternatively sought to be involved in developing the upgraded system but

21 were ultimately unsuccessful. (Id. ¶ 34.)

22 In 2018, Plaintiffs confirmed that divisions of the Air Force were marketing the

23 iMAFFS system to the international market. (Id. ¶ 41.) Plaintiffs contend that the

24 iMAFFS system is derived from the MAFFS II, and therefore marketing and

25 promotion of the iMAFFS will cause unlawful disclosure of Plaintiffs’ MAFFS II

26 proprietary data. (Id. ¶ 41.)

27 On February 20, 2019, Plaintiffs submitted claims of unlawful action in

28 violation of Air Force regulations and procurement law to the responsible Air Force

1 divisions. (Id. ¶ 44.) The Air Force agreed to cease certain activities surrounding the

2 marketing of iMAFFS but maintained its intention to develop Foreign Military Sales

3 (“FMS”) procurements for the iMAFFS, which Plaintiffs contend will ultimately

4 cause disclosure of MAFFS II proprietary data to the international market. (Id. ¶ 45.)

5 On September 17, 2019, the Air Force issued its final decision on Plaintiffs’ claims,

6 finding that the United States government owned the MAFFS II proprietary data, had

7 unlimited use rights in the data, including the rights to use the data to develop the

8 iMAFFS system for sale to the international market, and the Air Force approved the

9 iMAFFS for future marketing and sale under its FMS program. (Id. ¶ 52.)

10 Accordingly, in February 2020, Plaintiffs filed this action against Defendants

11 asserting violations of the Administrative Procedure Act (“APA”) and seeking

12 declaratory and injunctive relief. (See generally Compl.) Plaintiffs contend that

13 Defendants’ use and disclosure of the MAFFS II proprietary data constitutes unlawful

14 agency action in violation of the Trade Secrets Act and federal procurement law. (See

15 id. ¶¶ 6, 56–57.) Plaintiffs seek a determination that Defendants have no ownership

16 rights in, and may not use or disclose, the MAFFS II proprietary data to develop or

17 market the iMAFFS. (Id. ¶¶ 65–66.)

18 Defendants move to dismiss Plaintiffs’ Complaint for lack of subject matter

19 jurisdiction and failure to state a claim.2 (Mot. 4.)

20 III. LEGAL STANDARD

21 Pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a party may

22 move to dismiss a case for lack of subject matter jurisdiction. Fed. R. Civ. P.

23 12(b)(1). “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian

24 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power

25 authorized by Constitution or a statute, which is not to be expanded by judicial

26 decree.” Id. (internal citations omitted). “It is to be presumed that a cause lies outside

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28 2 As the Court finds the jurisdictional question dispositive, it does not reach Defendants’ arguments

that Plaintiffs fail to state a claim.

1 this limited jurisdiction, and the burden of establishing the contrary rests upon the

2 party asserting jurisdiction.” Id. (internal citations omitted). Once a party has moved

3 to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the plaintiff

4 bears the burden of demonstrating that the court has jurisdiction. Id.; see also

5 Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). “A

6 plaintiff suing in a federal court must show in his pleading, affirmatively and

7 distinctly, the existence of whatever is essential to federal jurisdiction, and, if he does

8 not do so, the court . . . must dismiss the case . . . .” Tosco Corp. v. Communities for a

9 Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001) (per curiam), abrogated on other

10 grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010) (quoting Smith v. McCullough,

11 270 U.S. 456, 459 (1926)).

12 Where the United States is a defendant, a mere showing of federal jurisdiction

13 does not suffice. This is because “the United States, as sovereign, is immune from

14 suit save as it consents to be sued . . . and the terms of its consent to be sued in any

15 court define that court’s jurisdiction to entertain the suit.” Lehman v. Nakshian, 453

16 U.S. 156, 160 (1981) (internal quotation marks omitted); Gabriel v. Gen. Servs.

17 Admin., 547 F. App’x 829, 830 (9th Cir. 2013) (“The United States is immune from

18 suit unless it has expressly waived its sovereign immunity by consenting to be sued;

19 the existence of such consent is a prerequisite for jurisdiction.” (internal quotation

20 marks omitted)). Absent a waiver of sovereign immunity, courts have no subject

21 matter jurisdiction over cases against the government. United States v. Mitchell, 463

22 U.S. 206, 212 (1983). The party suing the United States bears the burden to identify

23 an unequivocal waiver of immunity. Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir.

24 1983).

25 IV. DISCUSSION

26 Defendants move to dismiss for lack of subject matter jurisdiction on the

27 ground that Plaintiffs’ claims arise from a government contract over which the

28 Contract Disputes Act (“CDA”) vests exclusive jurisdiction in the United States Court

1 of Federal Claims. (Mot. 4.) Plaintiffs respond that their claims are not contract

2 disputes subject to the CDA, but instead concern Defendants’ decision to unlawfully

3 disclose Plaintiffs’ MAFFS II proprietary data. (Opp’n 5, 9–16.) Plaintiffs contend

4 their claims are cognizable under the APA and, accordingly, the APA and 28 U.S.C.

5 § 1331 together provide this Court with subject matter jurisdiction. (Id. at 7–9.)

6 A. Subject Matter Jurisdiction & Sovereign Immunity

7 Plaintiffs contend the general jurisdiction statute, 28 U.S.C. § 1331, provides

8 subject matter jurisdiction here. (Opp’n 7; Compl. ¶ 9.) That section provides

9 original jurisdiction to district courts over “all civil actions arising under the

10 Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. However,

11 section 1331 does not waive sovereign immunity. See Holloman, 708 F.2d at 1401;

12 see Chatman v. United States, No. CV 14-1244-PA (MANx), 2014 WL 6367110,

13 at *3 (C.D. Cal. Oct. 22, 2014), aff’d, 671 F. App’x 427 (9th Cir. 2016) (“An assertion

14 that a general jurisdictional statute applies does not suffice to confer jurisdiction when

15 the government did not waive its immunity.”).

16 For a waiver of sovereign immunity, Plaintiffs invoke the APA, 5 U.S.C.

17 §§ 701–06, which provides a limited waiver of sovereign immunity for claims seeking

18 review of agency action. (Opp’n 7; Compl. ¶¶ 7, 9, 23); see Chrysler Corp. v. Brown,

19 441 U.S. 281, 317–18 (1979) (recognizing that an agency’s decision to disclose a

20 proprietor’s trade secret information is “reviewable agency action” within the meaning

21 of the APA). Specifically, the APA waives the sovereign immunity of the United

22 States only if (1) the plaintiff’s “claims are not for money damages, (2) an adequate

23 remedy for its claims is not available elsewhere[,] and (3) its claims do not seek relief

24 expressly or impliedly forbidden by another statute.” Tucson Airport Auth. v. Gen.

25 Dynamics Corp., 136 F.3d 641, 645 (9th Cir. 1998); Suburban Mortg. Assocs., Inc. v.

26 U.S. Dep’t of Hous. & Urban Dev., 480 F.3d 1116, 1122 (Fed. Cir. 2007) (citing

27 5 U.S.C. §§ 702, 704).

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1 Pertinent here, the Tucker Act, 28 U.S.C. §§ 1346 and 1491, also includes a

2 limited waiver of sovereign immunity. See Suburban, 480 F.3d at 1121. This Act

3 grants the United States Court of Federal Claims “jurisdiction over any claim against

4 the United States founded . . . upon any express or implied contract with the United

5 States.” N. Side Lumber Co. v. Block, 753 F.2d 1482, 1484 (9th Cir. 1985) (quoting

6 28 U.S.C. § 1491(a)(1)). It expressly divests district courts of jurisdiction over “any

7 civil action or claim against the United States founded upon any express or implied

8 contract with the United States . . . which [is] subject to sections 7104(b)(1) and

9 7107(a)(1) of” the CDA. 28 U.S.C. § 1346(a)(2); see also Mendenhall v. Kusicko,

10 857 F.2d 1378, 1379 (9th Cir. 1988) (noting that jurisdiction resided with the Court of

11 Federal Claims where plaintiff’s claim was founded on an express contract with the

12 United States, subject to the CDA).

13 Significantly for our purposes, the Tucker Act limits “the remedies available in

14 actions on government contracts” to money damages. N. Side Lumber, 753 F.2d

15 at 1485. In light of this limitation, the Ninth Circuit has repeatedly held that “[t]he

16 Tucker Act . . . impliedly forbids declaratory and injunctive relief and precludes the

17 APA § 702 waiver of sovereign immunity for any claim founded upon an express or

18 implied contract with the United States.” Cooper v. Haase, 750 F. App’x 600, 601

19 (9th Cir. 2019) (brackets and internal quotation marks omitted); Gabriel, 547 F.

20 App’x at 831 (“This limitation (that only money damages are allowed for contract

21 claims against the government) ‘impliedly forbids’ declaratory and injunctive relief

22 and precludes a § 702 waiver of sovereign immunity.”); see, e.g., Tucson, 136 F.3d

23 at 646; N. Star Alaska v. United States, 14 F.3d 36, 37–38 (9th Cir. 1994); N. Side

24 Lumber, 753 F.2d at 1485; Gengler v. U.S. ex rel. Dep’t of Def. & Navy, 453 F. Supp.

25 2d 1217, 1228 (E.D. Cal. 2006).3 Consequently, if Plaintiffs’ claims for declaratory

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3 The Federal Circuit has expressly declined to address whether it agrees with the Ninth Circuit that

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the Tucker Act impliedly precludes the APA’s waiver of sovereign immunity, but noted that district

28 courts may take guidance on the question from their regional circuits. See Suburban, 480 F.3d

at 1128 (citing, among other cases, N. Side Lumber).

1 and injunctive relief relate to a contract with the government such that the Tucker Act

2 applies, the Act precludes the APA’s sovereign immunity waiver and this Court lacks

3 jurisdiction.

4 Also relevant, the CDA includes a limited waiver of sovereign immunity for

5 contract claims against the federal government filed in the Court of Federal Claims.

6 Winter v. FloorPro, Inc., 570 F.3d 1367, 1370 (Fed. Cir. 2009). The CDA’s grant of

7 jurisdiction is narrower than the Tucker Act’s. Id. at 1372. Where the Tucker Act

8 covers constitutional, statutory, and contract claims against the government, the CDA

9 applies only “to any express or implied contract . . . made by an executive agency for”

10 procurement of property or services, other than real property. 41 U.S.C. § 7102(a).

11 The CDA provides that “a contractor,” defined as any party to a federal government

12 contract other than the federal government, “may only file suit in the Court of Federal

13 Claims.” Williams v. United States Dep’t of Agric., No. 13-CV-00508-JST, 2013 WL

14 5567486, at *4 (N.D. Cal. Oct. 7, 2013) (quoting Texas Health Choice, L.C. v. Off. of

15 Pers. Mgmt., 400 F.3d 895, 899 (Fed. Cir. 2005)). As such, while the waivers of

16 sovereign immunity under the Tucker Act and the CDA are not identical, Winter, 570

17 F.3d at 1372, both ultimately divest district courts of jurisdiction over claims

18 concerning contracts with the government. Consequently, as with the Tucker Act, if

19 the CDA applies, this Court lacks subject matter jurisdiction to hear the dispute

20 because jurisdiction lies exclusively with the Court of Federal Claims.

21 The Court’s jurisdiction turns on whether Plaintiffs’ claims relate to a

22 government contract subject to the Tucker Act’s or the CDA’s restrictions.

23 B. Contract Disputes Act & Tucker Act

24 Defendants argue Plaintiffs’ claims relate to the Data Rights Agreement and

25 2000 Contract, meaning the CDA governs and deprives this Court of jurisdiction.

26 (See Mot. 8.) Defendants contend that Plaintiffs’ frame their requested relief as

27 falling under the APA in an attempt to “plead around the CDA to bring a claim

28 relating to a contract before a district court.” (Id. at 9.) Plaintiffs counter that their

1 claims do not relate to the 2000 Contract or the Data Rights Agreement, but, rather,

2 “[t]he essence of Plaintiffs’ claim is the violation of the Trade Secrets Act in

3 unlawfully using and disseminating Plaintiffs’ proprietary data.” (Opp’n 9.) Plaintiffs

4 insist that, even if their claims relate to the contracts, the CDA does not apply because

5 Plaintiffs are not attempting to enforce either contract. (Opp’n 13–16.)

6 In the CDA, Congress enacted a comprehensive statutory scheme governing

7 disputes regarding government contracts. Winter, 570 F.3d at 1369; see Williams,

8 2013 WL 5567486, at *3–4 (discussing the procedural prerequisites to a contractor

9 filing suit in the Court of Federal Claims). “The intent behind [the CDA’s] scheme is

10 to confine these government contract disputes to expert tribunals created expressly for

11 that purpose.” United States v. Suntip Co., 82 F.3d 1468, 1474 (9th Cir. 1996).

12 “[C]entralizing the resolution of government contract disputes in the Court of Federal

13 Claims . . . ensure[s] national uniformity in government contract law.” Williams,

14 2013 WL 5567486, at *4 (quoting Texas Health Choice, 400 F.3d at 899). “That

15 intent is defeated if a contracting party may, by filing a declaratory judgment action in

16 district court, compel the government to litigate the merits of its contracting officers’

17 decisions in district court.” Suntip, 82 F.3d at 1474. Accordingly, where a

18 government contract is involved, courts must look beyond a plaintiff’s articulation to

19 identify the essence of the claim. See Suburban, 480 F.3d at 1124 (“[W]e must look

20 beyond the form of the pleadings to the substance of the claim.”); Texas Health

21 Choice, 400 F.3d at 900 (finding that plaintiff’s articulation of relief “is of no

22 consequence to the question of jurisdiction because the complaint relates to a dispute

23 implicating a contract with the [g]overnment”).

24 A claim is contractual in nature under the CDA where it “relates to” or has

25 “some relationship to the terms or performance of a government contract.” Todd

26 Constr., L.P. v. United States, 656 F.3d 1306, 1312 (Fed. Cir. 2011) (discussing that

27 “claim” and “related to” should be read broadly under the CDA). To determine

28 whether a claim is “founded upon a contract for the purposes of the Tucker Act,”

1 courts consider “the source of the rights upon which the plaintiff bases its claims,

2 and . . . the type of relief sought (or appropriate).” Gabriel, 547 F. App’x at 831

3 (quoting Megapulse v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982)). Thus, where a

4 plaintiff’s claim is “concerned solely with rights created within the contractual

5 relationship and has nothing to do with duties arising independently of the contract[,]

6 the claim is founded upon a contract with the United States and is therefore within the

7 Tucker Act and subject to its restrictions on relief.” N. Star Alaska, 14 F.3d at 37

8 (internal quotation marks and alterations omitted). Similarly, where the relief a

9 plaintiff seeks is a determination of contract rights, the claim is contractually-based

10 for purposes of the Tucker Act and the district court lacks jurisdiction. See Tucson,

11 136 F.3d at 647 (finding claim contractually-based where plaintiff was “asking the

12 district court to decide what its contract rights [were]”).

13 Plaintiffs invoke the APA to seek declaratory and injunctive relief regarding the

14 proprietary rights to use or disclose the MAFFS II systems data. (See Compl. ¶ 66;

15 Opp’n 7–9.) But the MAFFS II systems data rights are expressly defined in the Data

16 Rights Agreement, with explicit reference that they derive from the 2000 Contract.

17 (DRA 2 (stating that ownership and use rights in the MAFFS II systems data are “set

18 forth in [the 2000 Contract]”); Compl. ¶ 30.) And Plaintiffs do not dispute that the

19 2000 Contract is a government contract under the CDA, subject to the exclusive

20 jurisdiction of the Court of Federal Claims. (Opp’n 13.) In essence, Plaintiffs seek a

21 determination of rights under the contracts; thus, their claims relate to and are

22 concerned solely with the rights articulated in Data Rights Agreement and the

23 2000 Contract.

24 Plaintiffs mention in passing that Aero Union developed the MAFFS II systems

25 at “private expense,” implying that the rights in dispute arose independently from the

26 2000 Contract. (Opp’n 14.) However, this implication is contradicted by Plaintiffs’

27 allegations and the express terms of the Data Rights Agreement, which establish that

28 the MAFFS II data in dispute was developed pursuant to the 2000 Contract.

1 The Data Rights Agreement provides that, in April 2000, the Forest Service and

2 Aero Union entered into the 2000 Contract, pursuant to which Aero Union was to

3 “design, develop, and fabricate a new prototype” MAFFS system. (DRA 1; Compl.

4 ¶ 27.) At the termination of the contract in 2012, “[t]he MAFFS II data rights, patents

5 and other intellectual property developed under the program were owned by Aero

6 Union, subject to the [Forest Service’s] use rights derived from the contract.”

7 (Compl. ¶ 27 (emphases added).) UAC subsequently acquired title to Aero Union’s

8 MAFFS II data rights through the foreclosure sale, and obtained the portable hard

9 drive with its MAFFS data that UAC later agreed to deliver to the Forest Service for

10 “good and valuable consideration.” (DRA 1; Compl. ¶ 31.) In the Data Rights

11 Agreement, UAC and the Forest Service each expressly agreed,

12 [A]s set forth in [the 2000 Contract], the technical data produced or

13 specifically used or related to the [MAFFS II systems] developed

pursuant to such contract shall remain the property of UAC . . . and [the

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Forest Service] shall have unlimited rights to view and use the data

15 required for the continued operation and maintenance of the [MAFFS]

product.

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17 (DRA 2 (emphases added).) Plaintiffs allege that the Forest Service conveyed the

18 hard drive with the MAFFS II data to Defendants, which data Defendants are now

19 using unlawfully. (Compl. ¶¶ 32–33.) Plaintiffs ask the Court to determine the

20 parties’ rights to use or disclose the MAFFS II data that UAC conveyed via the hard

21 drive pursuant to the Data Rights Agreement. (See Compl. ¶¶ 53–66.) However, if

22 the only data Defendants possess derives from the hard drive UAC delivered to the

23 Forest Service pursuant to the Data Rights Agreement, then the only data Defendants

24 may be using or disclosing is the data developed pursuant to the 2000 Contract. As a

25 result, Plaintiffs claims are concerned solely with rights created within the contractual

26 relationship and not independent obligations, and the claims are therefore

27 contractually based.

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1 Plaintiffs’ reliance on Megapulse, Inc. v. Lewis is unavailing. (See Opp’n 2,

2 10–12.) In Megapulse, the D.C. Circuit found the district court had jurisdiction over a

3 plaintiff’s APA claims seeking to prevent government disclosure of plaintiff’s

4 proprietary data. 672 F.2d at 971. There, the plaintiff delivered independently

5 developed proprietary data related to his design of a long-range transmitter to the

6 federal government pursuant to a contract. See id. at 962. When the government

7 subsequently sought to disclose the data, the plaintiff sought an injunction in district

8 court under the APA, alleging a violation of the Trade Secrets Act. Id. at 963. The

9 court in Megapulse recognized “the possible conflict between jurisdiction over

10 APA-based claims and the restricted role of the federal courts in contract actions

11 under the Tucker Act,” and “reemphasize[d] . . . that an action against the United

12 States which is at its essence a contract claim lies within the Tucker Act and that a

13 district court has no power to grant injunctive relief in such a case.” Id. at 966–67.

14 Nevertheless, the court in Megapulse found the plaintiff’s claim was not “‘at its

15 essence’ a contract claim” because the plaintiff sought to protect proprietary data

16 developed before it contracted with the government and prevent disclosure of only six

17 specific pages of data reflecting plaintiff’s prior-developed intellectual property. Id.

18 at 966, 969. Thus, the source of rights underlying the claim arose independently from

19 any contract, so the plaintiff’s claim was not contractually-based within the Tucker

20 Act. Id. at 971; see also Dowty Decoto, Inc. v. Dep’t of Navy, 883 F.2d 774, 779–80

21 (9th Cir. 1989) (finding plaintiff’s APA claim to prevent disclosure of proprietary

22 rights was not contractually based because the plaintiff had developed a workable

23 design with patents in place before contracting with the government, and the contract

24 was for parts procurement, not research and development).

25 Here, in contrast, Plaintiffs’ allegations and the Data Rights Agreement

26 establish that the MAFFS II system was “design[ed], develop[ed], and fabricate[d]”

27 pursuant to the 2000 Contract with the federal government over many years. (Compl.

28 ¶¶ 27–28.) Unlike Megapulse, the allegations here do not support that the MAFFS II

1 data conveyed on the hard drive was developed prior to or independently from the

2 2000 Contract. Further, where the plaintiff in Megapulse sought to prevent disclosure

3 of six specific documents reflecting preexisting proprietary data, Plaintiffs here seek

4 to prevent disclosure of all data related to the MAFFS II system; they do not identify

5 or otherwise distinguish any prior-developed data from that developed pursuant to the

6 2000 Contract. Thus, the disputed rights here do not arise independently from, but

7 rather relate entirely to, the government contracts and thus are contractually based.

8 In consideration of Congress’s restriction on district courts’ jurisdiction with

9 respect to federal government contracts and the purpose behind the Acts to centralize

10 such claims in the Court of Federal Claims, and in light of Plaintiffs’ well-pleaded

11 allegations and the express language of the Data Rights Agreement establishing that

12 the MAFFS II data were developed pursuant to the 2000 Contract, the Court finds

13 Plaintiffs’ claims for declaratory and injunctive relief under the APA relate to a

14 government contract. Consequently, the Tucker Act applies and precludes the APA

15 § 702 waiver of sovereign immunity. See Gabriel, 547 F. App’x at 830 (citing

16 Tucson, 136 F.3d at 645). Therefore, regardless of whether the contracts at issue

17 come under the narrower limitations of the CDA, this Court lacks subject matter

18 jurisdiction and must dismiss.4

19 C. Leave to Amend

20 Where a district court grants a motion to dismiss, it should generally provide

21 leave to amend unless it is clear the complaint could not be saved by any amendment.

22 See Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,

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4 Plaintiffs also assert 28 U.S.C. § 1491(b)(1) as a basis for jurisdiction over their claims that

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Defendants violated or will violate federal procurement law. (Compl. ¶¶ 9, 58.) Although Plaintiffs

25 fail to raise section 1491(b)(1) in opposition to Defendants’ Motion, such an argument would

nevertheless fail as jurisdiction under § 1491(b)(1) is also vested exclusively with the Court of

26 Federal Claims. See Gonzalez-McCaulley Inv. Grp. Inc. v. U.S. Dep’t of Veteran Affs., No. CV-13-

06877-BRO (JEMx), 2014 WL 12610145, at *3, 4 (C.D. Cal. Feb. 10, 2014) (discussing that

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Congress ended district courts’ jurisdiction and granted exclusive jurisdiction over § 1491(b)(1)

28 claims to the Court of Federal Claims; “[T]he jurisdiction granted to the Court of Federal Claims

under § 1491(b)(1) is expansive.”).

1} 1031 (9th Cir. 2008). Leave to amend may be denied when “the court determines that

the allegation of other facts consistent with the challenged pleading could not possibly

3 || cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc., 806 F.2d

4} 1393, 1401 (9th Cir. 1986). Thus, leave to amend “is properly denied... if

5 || amendment would be futile.” Carrico v. City and Cnty. of San Francisco, 656 F.3d

6 | 1002, 1008 (9th Cir. 2011).

7 Here, dismissal is necessary because the Court lacks subject matter jurisdiction.

8 | However, it is possible Plaintiffs can allege facts showing that the MAFFS I

9 || proprietary data was developed privately, outside of the government contracts. Thus,

10 || the Court does not find that amendment would be futile and, accordingly, leave to

11 || amend is appropriate.

12 Vv. CONCLUSION

13 For the reasons discussed above, the Court GRANTS Defendants’ Motion to

14 || Dismiss with leave to amend. (ECF No. 13.) Plaintiffs may file a First Amended

15 | Complaint addressing the identified deficiencies within fourteen days of the date of

16 || this Order. If Plaintiffs timely file an amended complaint, Defendants must file their

17 || response in accordance with Rule 15(a)(3). Failure by Plaintiffs to timely amend will

18 || result in the dismissal and closing of this case.

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20 IT IS SO ORDERED.

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22 March 2, 2021 ee

Ged ate

5 OTIS D. IGHT, I

UNITED STATES DISTRICT JUDGE

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