Three cases being argued next month at the Federal Circuit attracted amicus briefs. One of these cases is Hawaiian Dredging Construction Co. v. United States, a government contract case appealed from the Court of Federal Claims. In it, the Federal Circuit will review a dismissal of a complaint seeking damages based on alleged government-caused delays in a contractor’s fulfillment of its contractual obligations. This is our argument preview.
In its opening brief, Hawaiian Dredging Construction Co. argued that the “Claims Court rushed to judgment in dismissing HDCC’s Complaint without giving HDCC an opportunity to amend.” HDCC claimed the court made several errors.
First, HDCC argued, “the Claims Court erred by effectively finding that HDCC assumed all risks under a firm fixed-price contract.” According to HDCC, the court “ignored the bedrock of government contracting” in which “a contractor is entitled to a change by written or oral order or a constructive change when the Government’s failure resulted in additional work that increased the contract price and/or time to perform.” HDCC argued that, in its complaint, it “alleged that the Government’s delay in fulfilling its contractual obligations and other actions and inactions resulted in additional work and increased costs and time of performance,” which it argued is “sufficient to state a plausible action.”
Second, HDCC argued that, “contrary to the well-settled law, the Claims Court did not accept HDCC’s well plead allegations as true or construe the allegations in the light most favorable to HDCC.” HDCC contended that the court “made factual findings regarding foreseeability, materiality, and other potential defenses to HDCC’s claims all of which are improper when ruling on a Rule 12(b)(6) Motion to Dismiss.”
Third, HDCC argued “the Claims Court erred by denying HDCC’s Motion for Reconsideration” because “the Claims Court’s dismissal without prejudice was tantamount to a dismissal with prejudice, which created a manifest injustice to HDCC.” Moreover, HDCC noted, the “Court erred in denying HDCC’s Motion for Leave to Amend” because “the proposed Amended Complaint addressed all of the alleged deficiencies in HDCC’s Complaint and stated plausible causes of action against the Government.”
In its response brief, the United States argued against HDCC’s characterization of the dismissal as a “rush to judgment” by highlighting that on several occasions HDCC “fail[ed] to seek leave to amend.” The government argued that “HDCC would have this [c]ourt allow it to amend its complaint ad infinitum, or at least until HDCC gets it right.” Moreover, the government contended that, “from the start,” HDCC “failed to state a claim, for either an equitable adjustment for alleged changes or for a so-called breach of the Changes clause of the Contract.” According to the government, the agency in question “did not directly or constructively order HDCC to perform work outside of its contractual requirements.” The government also explained that “the myriad issues HDCC allegedly encountered” were “HDCC’s sole responsibility under the firm fixed-price Contract and reasonably foreseeable.”
In its reply brief, HDCC argued the “Government’s Brief in this Appeal demonstrates the trial court’s errors in deciding the Government’s Motion to Dismiss.” In fact, HDCC argued, “the Government points out improper factual findings and determinations that the trial court relied upon to decide the motion to dismiss.” According to HDCC, “the Government asks this [c]ourt to ignore HDCC’s well plead allegations to save the trial court’s decision from reversal.” Ultimately, HDCC contended, “the Government’s Brief attempts to ‘fill in the blanks’ to cover the trial court’s errors and failures.”
The Associated General Contractors of America, Inc. filed an amicus brief in support of reversal. The amicus brief cited concern that, “[i]f left to stand, the Court of Federal Claims’ dismissal of this case at the early stages of litigation can only have a chilling effect upon, and create unnecessary uncertainty in, the extent of factual allegations that federal construction contractors must allege in order to prosecute constructive change claims under the Contract Disputes Act.”
Oral argument is scheduled to be heard on Monday, February 3. We will keep track of this case and report on any developments.