Opposition — Fidelity Construction Co. v. United States

In the Supreme Court of the Hnited

OCTOBER TERM, 1983

FIDELITY CONSTRUCTION COMPANY, PETITIONER

¥,

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Rex E, Lee

Solicitor General

J, PAuL McGRATH

Assistant Attorney General

WILLIAM KANTER

WILLIAM G. COLE

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

Office -Supreme Court,

riILE @

a AUG 17 1983

ALEXANDER L. STEVAS,

CLERK

ae

QUESTIONS PRESENTED

1, Whether interest on amounts awarded by agency con-

tract appeal boards under the Contract Disputes Act of

1978 runs only from the date the claim is properly certified

under the Act rather than from the date an improper,

uncertified claim is filed.

2. Whether the Equal Access to Justice Act authorizes

the award of attorneys’ fees by agency contract appeal

boards established under the Contract Disputes Act of

1978.

(I)

TABLE OF CONTENTS

Page

a l

IN von ch cece cess a I

ea l

ee 3

ee OTs 7

TABLE OF AUTHORITIES

Cases:

Alyeska Pipeline Service Co. v. Wilderness

Bomtety, 421 U5, BOO onc kken ccc ccnccess 5

Fidelity Construction Co., 82-1 B.C.A.

ce tte Re ee 3

Folk Construction Co. v. United States,

No. 99-00C (Cy. Cl. Jam. 06, 196!) ............ 4

Paul E. Lehman, Inc. v. United States,

7S Fe Te hhh oh cc ss is, 4

Ruckelshaus v. Sierra Club, No. 82-242

CPE TPRS) eee ec ee. 5

Skelly & Loy v. United States,

oe ee 4

Uneiood Seates Vv. Mitte, SOS U8. 0 ooo cn cccccs 6

United States v. N.Y. Rayon Importing Co.,

Se Sets OO bo hk ee 4

United States v. Testan, 424 U.S. 392 .......... 6

(111)

IV

Statutes:

Contract Disputes Act of 1978, 41 U.S.C.

(Supp. V) 601 ef seq. :

Section 6(a), 41 U.S.C. (Supp. V)

NE oe hc ick nicn.

Section 6(c), 41 U.S.C. (Supp. V)

ES ne

Section 8(d), 41 U.S.C. (Supp. V)

ei ce NE GE ON GE re

611 *e #eweeeneeeneeeeneeneteeenteeeeneeeeeeneeee

Equal Access to Justice Act:

SU FOR ook ce ciccc es.

mE Oe ee

28 U.S.C. Gupp. VY) 441AGNS) .......

Federal Courts Improvement Act of 1982,

Pub. L. No. 97-166, 96 Stat. 29 ........-

DUR Fe coco ec ie cece cerenieces

Miscellaneous:

S. Rep. No. 95-1118, 95th Cong., 2d Sess.

bf) el an ee

Page

Inu the Supreme Court of the Wnited States

OCTOBER TERM, 1983

No. 82-2060

FIDELITY CONSTRUCTION COMPANY, PETITIONER

V.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

BRIEF FOR TF E UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. Al-A20) is

reported at 700 F.2d 1379.

JURISDICTION

The judgment of the court of appeals was entered on

February 18, 1983. A petition for rehearing was denied on

March 17, 1983 (Pet. App. B). The petition for a writ of

certiorari was filed on June 15, 1983. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

In April 1979, petitioner was awarded a contract by the

Federal Aviation Administration to install an experimental

runway lighting system at Bradley International Airport in

Windsor Locks, Connecticut (Pet. App. A2). Petitioner and

the FAA had several disputes during the performance of the

contract. Asa resuit, on October 26, 1979, petitioner filed a

(1)

2

25-item claim totalling $237,348.12 with the FAA’s con-

tracting officer (ibid.). This claim was revised on November

15, 1979, revised again on November 30, 1979, and revised a

third time on January 23, 1980, at which time the claim

stood at approximately $251,000 (ibid.). The FAA contract-

ing officer found that petitioner had supported only

$37,648.29 of the total amount of the claim, but he denied

the claim in its entirety because he believed that fraud was

involved in its submission (ibid.).

Petitioner appealed this decision to the Department of

Transportation Board of Contract Appeals. At a pretrial

conference, the Board advised both petitioner and the con-

tracting officer that petitioner’s various claims had not been

submitted in compliance with the certification requirement

of Section 6(c) of the Contract Disputes Act of 1978

(“CDA”), 41 U.S.C. (Supp. V) 605(c). That section requires

a claimant seeking more than $50,000 to certify that:

the claim is made in good faith, that the supporting

data are accurate and complete to the best of his

knowledge and belief, and that the amount requested

accurately reflects the contract adjustment for which

the contractor believes the government is liable.

None of petitioner’s first three submissions had been

certified.

On May 29, 1980, petitioner submitted its first certified

claim, which totalled $257,066 (Pet. App. A3). Petitioner’s

appeal to the Board resulted ina final award of $320,773.04

“plus interest on hitherto unpaid amounts, computed

* * * from the date of filing of the certified claim, May 19,

1980, until payment * * *” (ibid.).!

'The May 19, 1980 date appears to have been a clerical error. Both

petitioner and the government agree that the certified claim was filed on

May 29, 1980 (Pet. App. A3 n.1).

3

On October 30, 1981, petitioner, in a motion for recon-

sideration to the Board, asked that interest be awarded

from the date petitioner filed its first uncertified claim,

October 26, 1979, rather than from the date of its first and

only certified claim, May 29, 1980. Relying on the Equal

Access to Justice Act (“EAJA”), petitioner also requested

an award of attorneys’ fees and expenses incurred during its

litigation before the Board (Pet. App. A3).

The Board denied petitioner's claim for additional inter-

est, stating that “interest does not run on a claim which is

patently and grossly inaccurate * * * until such time as the

claimant corrects the inaccuracies.” Fidelity Construction

Co., 82-1 B.C.A. (CCH) para. 15,633, at 77,225 (1982). The

Board found that such a qualifying claim had not been

submitted until the certified claim was filed. /d. at 77,226.

The Board denied attorneys’ fees based on its conclusion

that the EAJA does not authorize recovery of fees and

expenses incurred prior to the October |, 1981 effective date

of the Act. /d. at 77,229.

The court of appeals affirmed the Board's rulings (Pet.

App. Al-A20). On the question of interest, the court ruled

that an uncertified claim for over $50,000 is a “legal nullity”

under the CDA and that only a certified claim for such a

sum could cause interest to accrue (Pet. App. A8). The

court also ruled that the Board of Contract Appeals lacked

jurisdiction to award attorneys’ fees under the EAJA,

whether incurred before or after October 1, 1981 (id. at

Al0).

ARGUMENT

The court of appeals’ decision is correct and does not

conflict with any other judicial decision. Review by this

Court is therefore unnecessary.

4

1. Anallowance of interest ona claim against the United

States, absent constitutional requirements, requires an

explicit waiver of sovereign immunity by Congress. Such a

waiver must be found either in a specific statutory provision

or in an express contractual stipulation. United States v.

N.Y. Rayon Importing Co., 329 U.S. 654, 658-659 (1947).

Section 12 of the CDA, 41 U.S.C. (Supp. V) 611, pro-

vides for interest “from the date the contracting officer

receives the claim pursuant to section 605(a) of this title

from the contractor until payment thereof.” Section 605(a)

of Title 41 (Supp. V) requires all claims against the govern-

ment to be submitted in writing to the contracting officer

for a decision. The Court of Claims has ruled previously

that “unless a claim has been properly certified, it cannot be

considered under the statute,” Paul E. Lehman, Inc. V.

United States, 673 F.2d 352, 355 (1982), and that “ ‘to be

valid a claim must be properly certified.’ ” /bid., citing Folk

Construction Co. v. United States, No. 99-80C (Ct. Cl.

Jan. 16, 1981). Unless that requirement is met and the claim

has been properly submitted, the claim is invalid, and no

“decision” is possible under 41 U.S.C. (Supp. V) 605(a).

Skelly & Loy v. United States, 685 F.2d 414, 416 (Ct. Cl.

1982). If no decision is possible on the basis of the submis-

sion, then the provision for interest contained in 41 U.S.C.

(Supp. V) 611 has not been triggered and interest cannot

begin to accrue.?

Petitioner contends that the question whether interest

accrues on an uncertified claim is “of exceptional impor-

tance” and is causing “confusion” for government contrac-

tors (Pet. 24). Any such confusion would be totally obviated

?The fact that the contracting officer considered several of petition-

er’s uncertified claims is irrelevant because contracting officers have “no

authority to waive a requirement that Congress imposed.” Paul E.

Lehman, Inc. v. United States, supra, 673 F.2a ». 356.

3

if contractors simply certified all claims over $50,000, as

required by law. There is thus no need for the Court to

review this issue.

2. The court of appeals’ determination that a board of

contract appeals may not award attorneys’ fees under the

Equal Access to Justice Act is firmly based in the language

of the statute itself. Attorneys’ fees for non-judicial proceed-

ings are governed by Section 203(a)(1) of the EAJA, 5

U.S.C. 504(a)(1). That Section permits attorneys’ fees to be

awarded only by “[a]n agency that conducts an adversary

adjudication” (5 U.S.C. 504(a)(1)). “Adversary adjudica-

tion” is defined as “an adjudication under section 554 of this

title” (5 U.S.C. 504(b)(1)(C)). Proceedings before boards of

contract appeals, however, unquestionably are not adjudi-

cations under 5 U.S.C. 554. As explained in the Senate

Report on the CDA (S. Rep. No. 95-1118, 95th Cong., 2d

Sess. 15 (1978)):

Agency boards of contract appeals * * * are not sub-

ject to the adjudication procedures of the Administra-

tive Procedure Act (5 U.S.C. 554). This is plain from

the text of section 5 of the act (5 U.S.C. 554) and the

further explanation in the Senate Judiciary committee

Print, June 1945, pages 21-22, where money claims are

specifically excluded.

Because boards of contract appeals are thus not authorized

to pay attorneys’ fees under the EAJA, and because the

EAJA is the only basis alleged by petitioner for an award of

attorneys’ fees, sovereign immunity must bar the award of

such fees. See Ruckelshaus v. Sierra Club, No. 82-242 (July

1, 1983), slip op. 5; Alyeska Pipeline Service Co. v. Wilder-

ness Society, 421 U.S. 240, 267-268 & n.42 (1975).

Section 204(a) of the EAJA, 28 U.S.C. (Supp. V)

2412(d)(3), clearly authorizes a court to award attorneys’

fees and expenses to a prevailing party in an action for

6

judicial review of adversary adjudications under the CDA

and further provides that the court may also award fees

incurred during the earlier administrative adjudication. As

the court of appeals correctly noted, however, this provi-

sion contains not the slightest suggestion that the boards

themselves may award attorneys’ fees incurred as a part of

the administrative process (Pet. App.A12-A13). Waivers of

sovereign immunity “cannot be implied but must be

unequivocally expressed,” United States v. Testan, 424

U.S. 392, 399 (1976), quoting United States v. King, 395

U.S. 1, 4 (1969), and therefore 28 U.S.C. (Supp. V)

2412(d)(3) cannot authorize payment of a fee award here.

Petitioner attempts to avoid the specific limitations of the

EAJA by relying (Pet. 14) on Section 8(d) of the CDA, 41

U.S.C. (Supp. V) 607(d). That provision grants specified

jurisdiction to boards of contract appeals “to decide any

appeal” from certain decisions of contracting officers. It

further provides that, “{iJn exercising this jurisdiction, the

agency board is authorized to grant any relief that would be

available to a litigant asserting a contract claim in the Court

of Claims.”

Petitioner cites nothing, however, to suggest that Con-

gress intended this provision of the CDA, written in 1978, to

supersede by inference Congress’ subsequent specific provi-

sions for the award of attorneys’ fees under the EAJA.

Petitioner offers no support for defining “relief” in 41

U.S.C. (Supp. V) 607(d) to include attorneys’ fees, which

were not available in the Court of Claims in 1978. Addi-

tionally, there is no indication in the CDA that the boards’

sThe term “Court of Claims” in Section 8(d) is also unclear in light of

the Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96

Stat. 25. If that term is interpreted to refer to the new Claims Court,

then petitioner's case is made even more difficult because it is not clear

that the Claims Court has authority to award attorneys’ fees (see Pet.

App. Al3-Al14).

5

jurisdiction extends beyond deciding appeals from deci-

sions of contracting officers to include ruling on issues such

as attorneys’ fee claims that were not raised before those

officers. The court of appeals, by affirming the Board's

denial of attorneys’ fees, thus has given full effect to the

language of the CDA without enlarging the specific legisla-

tive grant of authority in the EAJA.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Rex E. Lee

Solicitor General

J. PauL McGRATH

Assistant Attorney General

WILLIAM KANTER

WILLIAM G. COLE

Attorneys

AUGUST 1983

DOJ-1983-08