[00:00:03] Speaker 02:
Our next case is agility public warehousing company KSCP versus the United States.

[00:00:40] Speaker 02:
Mr. Schaefer, you can reserve five minutes for rebuttal, correct?

[00:00:44] Speaker 06:
Thank you, your honor.

[00:00:45] Speaker 06:
Yes, please Looks like we're ready to go Good morning, your honors.

[00:00:51] Speaker 06:
May it please the court?

[00:00:52] Speaker 06:
Derek Schaeffer here on behalf of Agility.

[00:00:55] Speaker 06:
Your Honor, as the lower court adopted the unprecedented and anomalous position that the government's mere claim of an offset under the Debt Collection Act suffice to supersede the government's acknowledged contractual obligations, even though the government otherwise lacked underlying basis in law for the offset.

[00:01:13] Speaker 06:
The upshot of the decision below is that a bureaucrat say so combines with the Debt Collection Act to justify an offset by the United States that is otherwise illegal.

[00:01:24] Speaker 06:
That view of the contracting officer's offset determination as self-justifying is unlawful, it is unfair, and we respectfully submit untenable, and we ask this Court to reverse it.

[00:01:36] Speaker 06:
I'd note, Your Honors, that there is no precedent whatsoever for the trial court's interpretation of the Debt Collection Act.

[00:01:43] Speaker 06:
And Judge Wheeler below didn't claim to have any precedent for it.

[00:01:46] Speaker 06:
The American Airlines case that we cite that came up from the D.C.

[00:01:50] Speaker 06:
District Court to this Court is directly to the contrary as precedent, because there the District Court had determined that a claimed offset under the Debt Collection Act was contrary to the substantive law.

[00:02:02] Speaker 06:
and therefore it was unjustified.

[00:02:04] Speaker 06:
And what was up on appeal to this court was only the question as to whether the district court was wrong as to one tiny subset of the amounts of issue and whether there was a regulatory or contractual basis for that portion of the offset.

[00:02:17] Speaker 01:
Do you rely on cases other than American Airlines for the proposition that there has to be some underlying legal basis for the debt?

[00:02:24] Speaker 06:
Well, Judge Stoll, we think that the bedrock of that is really that the United States is held to the rule of law, is held to its contractual obligation.

[00:02:33] Speaker 06:
That has flowed throughout this Court's jurisprudence and the U.S.

[00:02:36] Speaker 06:
Supreme Court's jurisprudence.

[00:02:38] Speaker 06:
So I think as to the principle, there's that larger body of precedent.

[00:02:41] Speaker 06:
Specifically as to the Debt Collection Act, I think the American Airlines case is directly on point.

[00:02:46] Speaker 06:
There are other cases we have found where the analysis was made under the Debt Collection Act, and it was all about the substantive law judge.

[00:02:53] Speaker 06:
So it wasn't just, well, the government checked the boxes, and therefore it can claim this offset under the Debt Collection Act.

[00:03:00] Speaker 06:
It always goes to the substantive law and answers the dispute and resolves the dispute that way.

[00:03:05] Speaker 01:
What about the Cecile case?

[00:03:07] Speaker 01:
I mean, it doesn't directly answer the question, but in the Cecile case, this court held

[00:03:14] Speaker 01:
that the DCA was separate to the common law right of a contractual offset.

[00:03:21] Speaker 01:
And so how does that play into this?

[00:03:24] Speaker 06:
I've always understood, Judge Stoll, that there is some other basis, including in that case, outside of external to the Debt Collection Act.

[00:03:31] Speaker 06:
Yes, the United States may have special rights.

[00:03:33] Speaker 06:
It may, if it overpays a welfare beneficiary, if it makes some mistake that is a governmental mistake and is demonstrated to the court as a mistake, so that there was an erroneous payment,

[00:03:45] Speaker 06:
then the government can, under whatever that body of law is, exercise its rights under the Debt Collection Act.

[00:03:52] Speaker 06:
What to us is so anomalous and problematic about the decision below is that the Court of Federal Claims looked at the United States government's premise for the offset, that there had been some overpayment under the PCO contract, and confirmed that was spurious, that was wrong, that was contrary to the law of contract,

[00:04:12] Speaker 06:
And that was contrary to the common law.

[00:04:14] Speaker 06:
And there was no basis for this other than the fact that a bureaucrat who administers a contract determined that, yes, I'm going to assert an offset.

[00:04:24] Speaker 01:
What is the status of your – I think you've got a district court case filed in D.C.

[00:04:29] Speaker 01:
district court.

[00:04:29] Speaker 06:
Correct, you are.

[00:04:30] Speaker 01:
And that's filed under the APA.

[00:04:32] Speaker 01:
What exactly is the challenge there, and what is the status of that?

[00:04:36] Speaker 06:
It's a challenge of the Administrative Procedures Act to, among other things, the claimed offset or the claim under the PCO contract and the implications that has the monies owed to Agility Undisputedly under the DDKS contract.

[00:04:50] Speaker 01:
That case is stayed.

[00:04:51] Speaker 01:
So you're challenging the agency or what you refer to as the bureaucrats' determination that there is a debt.

[00:04:58] Speaker 01:
You're challenging that in that case, right?

[00:05:00] Speaker 06:
Absolutely.

[00:05:01] Speaker 06:
And I'll be candid about our end goal, which is to get them... You're not challenging it here.

[00:05:06] Speaker 01:
You're challenging the substance of that.

[00:05:07] Speaker 06:
Well, we thought that the straightforward path, Judge Dole, was to basically say we're owed money under the DDKS contract in an amount of 17.7 million dollars and counting.

[00:05:17] Speaker 06:
That is a claim for money damages from the United States in connection with the contract.

[00:05:21] Speaker 06:
We thought that fundamentally that case belongs in the court of federal claims coming up to this court.

[00:05:26] Speaker 06:
This court has been emphatic about that, the correctness of that jurisdictional path.

[00:05:32] Speaker 06:
We cite these cases in pages four and seven and eight of our reply, Christopher Village Suburban Mortgages Association.

[00:05:38] Speaker 06:
And my concern, Judge Stoll, consistent with the way the government has conducted this litigation thus far, is if we're sent back to the DC District Court,

[00:05:45] Speaker 06:
to pursue our APA claim there.

[00:05:48] Speaker 06:
The argument will come from the United States that it is jurisdictionally foreclosed, because at bottom, that is a claim for money damages.

[00:05:55] Speaker 06:
Again, citing the precedents that I was just citing, where we've seen the government make those sort of arguments.

[00:06:00] Speaker 06:
I think they will also point to Judge Wheeler's decision and claim that has race judicata effect, as perverse as that is.

[00:06:07] Speaker 06:
And they'll also say what they said candidly to Judge Wheeler, which is that the APA suit is illusory, because what we can't do, they said,

[00:06:14] Speaker 06:
under the Administrative Procedures Act case is challenge the math.

[00:06:18] Speaker 06:
Look behind the government's claim of an overpayment and challenge the premises.

[00:06:23] Speaker 00:
Let me just interrupt you.

[00:06:25] Speaker 00:
So I think the government's only real argument here is that because U.S.

[00:06:30] Speaker 00:
funds were used to pay

[00:06:33] Speaker 00:
a debt actually owed by the Iraqi government, that U.S.

[00:06:41] Speaker 00:
funds can be withheld from the payment of the United States' obligation on the Kuwaiti contract.

[00:06:47] Speaker 00:
Suppose we said

[00:06:49] Speaker 00:
that is wrong because Judge Wheeler is right about the absence of a common law offset.

[00:06:58] Speaker 00:
And it's also wrong because the DCA requires an obligation that's being offset to come from a source of law outside the DCA.

[00:07:10] Speaker 00:
Does that fully resolve this case in the sense of thereby entitling you

[00:07:18] Speaker 00:
to recover on the $17 million contract claim?

[00:07:23] Speaker 06:
Yes, Judge Toronto, it does, because that money is undisputedly owed under the DDKS contract.

[00:07:28] Speaker 06:
It is due to be paid.

[00:07:29] Speaker 06:
The only basis for the offset is that the government invoked in connection with the funds paid out under the PCO contract.

[00:07:36] Speaker 00:
That's exactly what Judge Wheeler looked at in the first substantive portion of his decision, and he looked... As I understand the government's argument here,

[00:07:45] Speaker 00:
It does not assert that there is a basis outside the DCA for the assertion of a debt to the United States under the Iraqi contract.

[00:08:00] Speaker 06:
Let me be fair to the United States of Toronto because I think they do make in their brief, and you'll hear this from Judge Grimaldi, an argument in the alternative that Judge Wheeler was wrong and there's some common law basis for them to recover those monies.

[00:08:12] Speaker 06:
But I agree with Your Honor that the premise of that is that there was a quote-unquote what they call an overpayment

[00:08:19] Speaker 06:
and that overpayment, just as Your Honor is saying, was in connection with the PCO contract.

[00:08:24] Speaker 00:
And just to underline this point, these were not monies that just... This is the argument, the common law argument that I took to be

[00:08:35] Speaker 00:
essentially relying on certain language taken out of context from the Seventh Circuit case in which there was undisputably an obligi-abligor relationship and the only question was whether the two different things being offset were sufficiently related but within the universe of obligor-abligi in both the offset thing and the place to be offset.

[00:08:57] Speaker 00:
I assume I reject that.

[00:09:00] Speaker 00:
Then I don't see the government has asserted that there is a legal source of the obligation that they want to offset the $80 million or something that runs to the United States.

[00:09:12] Speaker 00:
For example, they haven't said,

[00:09:14] Speaker 00:
agility committed fraud on the United States as administrator or something like that.

[00:09:21] Speaker 00:
You would agree that if that were true, there might be something to offset?

[00:09:25] Speaker 06:
Well, I agree 100 percent with everything your honor just said, and I would expand upon it by saying it is undisputed

[00:09:32] Speaker 06:
on the pleadings, and I think in fairness to Mr. Grimaldi, he's not going to deny Judge Toronto, that when these monies were paid by the United States, they were purposefully paid by the United States in response to the invoices that Agility was submitting under the PCO contract.

[00:09:49] Speaker 02:
All of these payments... Why isn't it claimed that there's been an overpayment enough?

[00:09:54] Speaker 06:
Because it's incoherent by its terms, Judge Reinoff, to say that the United States made an overpayment when they have foreclosed any adjudication of the competing contentious.

[00:10:03] Speaker 06:
We believe that agility was underpaid.

[00:10:05] Speaker 06:
Agility was underpaid on this contract to the tune of more than $40 million.

[00:10:09] Speaker 02:
There's no foreclosure of the application of the DCA.

[00:10:13] Speaker 06:
Well, I think that there is, Judge Raina, when it's a shared premise, per this court's prior holding, accepting the United States' arguments, that they were nothing more than an agent under the PCO contract.

[00:10:24] Speaker 06:
They had no liability under the PCO contract, and according to the same restatement third,

[00:10:28] Speaker 06:
that the court relied upon, they had no entitlements under the PCO contract.

[00:10:34] Speaker 02:
One last point.

[00:10:35] Speaker 02:
That goes to the argument that you have to have some form of contractual right in order to proceed under the DCA.

[00:10:42] Speaker 02:
But I read the DCA and all you need is a claim.

[00:10:46] Speaker 06:
But I believe that that claim, Your Honor, has to be based on something other than a bureaucrat say so, to take Judge Toronto's formulation, some law external.

[00:10:54] Speaker 02:
There's been an overpayment.

[00:10:55] Speaker 02:
The girl in south, 80 million dollars.

[00:10:57] Speaker 06:
But Judge Raina, with all due respect, they've never shown that in any court.

[00:11:02] Speaker 06:
And when we tried to have adjudication of competing contentions where we claimed underpayment and the United States claimed overpayment, that was the case as it was postured before the Armed Services Board of Contract Appeals.

[00:11:14] Speaker 06:
And the United States said that should never be adjudicated either way because the United States was not a principal to the contract.

[00:11:21] Speaker 06:
It was not a party to the contract.

[00:11:23] Speaker 06:
And so if there were any disputes about overpayment or underpayment, that's a dispute between agility and Iraq or between the United States and Iraq.

[00:11:32] Speaker 06:
But it is a matter of, I think, law and principle and equity that says if the United States has said that they cannot have liability under a contract, they also cannot be collected under the contract.

[00:11:43] Speaker 06:
And otherwise, Your Honor, it would give the United States exactly the supercontractual rights that Judge Wheeler in footnote eight of his opinion on page 14 of the appendix.

[00:11:53] Speaker 06:
He said, of course, that can't be right.

[00:11:55] Speaker 06:
The United States cannot be doing that.

[00:11:57] Speaker 06:
No party gets to do that.

[00:11:59] Speaker 06:
And it does not follow in the debt collection act that they can.

[00:12:02] Speaker 02:
persuaded.

[00:12:02] Speaker 02:
Tell me why the word claim in the DCA does not extend to an overpayment that the government has made.

[00:12:11] Speaker 06:
My only submission, Your Honor, is that it has to be an overpayment according to some law external to the DCA.

[00:12:19] Speaker 06:
And I think it would astonish the United States.

[00:12:22] Speaker 02:
But why doesn't it say that?

[00:12:23] Speaker 02:
Why doesn't the DCA say that?

[00:12:24] Speaker 06:
Because we do have courts that have looked at statutory changes to the DCA and recognized that there was no substantive change in law that resulted from those modifications.

[00:12:34] Speaker 06:
I think if you look at the natural understanding of a claim or a debt

[00:12:37] Speaker 06:
It is not that it is being conjured into existence by a bureaucrat.

[00:12:41] Speaker 06:
It is some pre-existing debt or claim that the United States is collecting on.

[00:12:45] Speaker 06:
And the last point, Judge Soule, if I may make it.

[00:12:47] Speaker 01:
I just want to ask you, because this is important.

[00:12:50] Speaker 01:
Trust me, you're going to want to answer this question.

[00:12:52] Speaker 01:
OK, yes.

[00:12:52] Speaker 01:
What about the broad language of Section 3701, which is exactly what I think Judge Rehm is referring to?

[00:13:00] Speaker 01:
There's broad language there in Section B1.

[00:13:03] Speaker 01:
defining claim or debt means any amount of funds or property that have been determined by an appropriate official of the federal government to be owed to the United States by a person, organization, or entity.

[00:13:13] Speaker 01:
A claim includes without limitation.

[00:13:15] Speaker 01:
And you go down to Part C and it says overpayments.

[00:13:17] Speaker 01:
So there's nothing there referencing common law or nothing.

[00:13:23] Speaker 01:
And so how do you respond to that?

[00:13:25] Speaker 06:
OK.

[00:13:25] Speaker 06:
To take that, let me start by taking the plain language just as you do, Judge Told, just as you do, Judge Raina.

[00:13:30] Speaker 06:
As I understand, determined to be owed, that means that there's been a determination that that money is owed.

[00:13:36] Speaker 06:
It is not a creation of a debt.

[00:13:39] Speaker 06:
It is not a manufactured determination.

[00:13:41] Speaker 06:
It assumes that that is something that was determined to be owed, and then a court can review for itself to say... Why does it say determined by an appropriate official of the federal government to be owed?

[00:13:52] Speaker 06:
I think the appropriate official is the civil servant.

[00:13:55] Speaker 06:
It is the bureaucrat.

[00:13:56] Speaker 06:
It's someone who's been authorized down the chain to administer contracts.

[00:14:00] Speaker 06:
That's how it was done here.

[00:14:02] Speaker 06:
And I do not think it would satisfy, even if you didn't think that that was true from the plain language and pre-existing law and the fact that Congress didn't mean to make some earth-shattering change in the law of government contracts and all other law.

[00:14:13] Speaker 06:
Even if you didn't believe that, Judge Dole, you would want to presume that the United States Congress acted constitutionally with sensitivity to due process, to rights of judicial review, to rights of a hearing, the ability to be dealt with fairly by the United States.

[00:14:27] Speaker 06:
And that constitutional avoidance principle means that you would want to construe the Debt Collection Act the way that we do and the way that every other court that we think has been deciding a dispute like this has approached it.

[00:14:40] Speaker 06:
We did.

[00:14:41] Speaker 06:
We raised constitutional avoidance and in fairness to Mr. Grimaldi, he does not deny that that reading of the DCA would be unconstitutional.

[00:14:48] Speaker 06:
And so as I understand the United States position, they want to put all their eggs in the basket of the APA and the DC District Court and assure you that, look,

[00:14:57] Speaker 06:
A court will look at this, it will do it in, you know, D.C.

[00:15:01] Speaker 06:
District Court, going up to the D.C.

[00:15:02] Speaker 06:
Circuit, and that's how these important questions will be resolved.

[00:15:06] Speaker 00:
But even the United States government... Can I just ask, getting back to the language, the definition of language, is it relevant or sufficient or wrong to say the person who's

[00:15:19] Speaker 00:
money you would otherwise pay but for the offset has to actually owe something to the United States.

[00:15:27] Speaker 00:
It's not somebody else owing money to the United States, and agility just doesn't owe a dime to the United States under the Iraqi contract.

[00:15:36] Speaker 06:
That has to be right.

[00:15:37] Speaker 06:
I think that every court that has looked at the Debt Collection Act has done so with the promise that that analysis is correct.

[00:15:44] Speaker 00:
crucial textual issue would be whether owed to the United States has to mean by this person as opposed to by somebody else.

[00:15:55] Speaker 06:
Yeah, and not just because a bureaucrat said so.

[00:15:57] Speaker 06:
That can't be the end of the inquiry.

[00:15:59] Speaker 00:
I got to tell you, I think that this focus on the bureaucratics, I find that a distraction here.

[00:16:05] Speaker 00:
I'm not getting that as helping your argument.

[00:16:07] Speaker 06:
I don't mean to distract Judge Toronto, but I think that Judge Wheeler, in his analysis below, basically said the only thing that a reviewing court is asking is were the procedural boxes checked, even if, to take Your Honor's premises, which I share, even if it's absolutely clear that there was no actual debt reclaimed owed by agility to the United States.

[00:16:27] Speaker 00:
Although there may well be a debt owed by somebody.

[00:16:31] Speaker 06:
It may be.

[00:16:31] Speaker 00:
In fact, $80 million may be.

[00:16:33] Speaker 06:
And that would be Iraq.

[00:16:34] Speaker 06:
That would be Iraq, exactly per the premises of this Court's prior holding and the arguments the United States made.

[00:16:38] Speaker 06:
And I know I'm running out of time, Your Honors.

[00:16:40] Speaker 06:
Let me just say briefly, we also have arguments here about the duty of good faith and fair dealing.

[00:16:45] Speaker 06:
And if nothing else, Judge Raina, even if the government had the statutory right to reach out and withhold these monies under the DDKS contract, under these circumstances, it's denying

[00:16:55] Speaker 06:
agility, the fair benefit of the bargain it struck under the DDKS contract.

[00:16:59] Speaker 06:
So you could, if you wanted to avoid the larger debt collection act question, you could decide the case that way.

[00:17:04] Speaker 06:
And there's, we submit that this is a case for judicial estoppel of the United States.

[00:17:08] Speaker 01:
Can I ask you one other question?

[00:17:09] Speaker 01:
I mean, on the procedural protections, there are certain procedures that are supposed to be followed in this case.

[00:17:15] Speaker 01:
And I'm just looking, like, why aren't those procedural, setting aside your challenge that those procedural protections weren't satisfied here?

[00:17:22] Speaker 06:
Which we would ask for a remand on it, at the very least.

[00:17:25] Speaker 01:
I'm wondering, you know, when you look at, you know, the purpose and the preamble to this DCA, it talks about having to ensure that debtors have all appropriate due process rights, including the ability to verify, challenge, compromise claims, and access to administrative appeals procedures, which are both reasonable and protect the interests of the United States.

[00:17:45] Speaker 01:
And the fact that there are procedural protections, why aren't those enough in this circumstance to protect?

[00:17:51] Speaker 06:
Because, respectfully, they are rendered meaningless and hollow if the upshot of those procedural protections is when agility goes to court and said, this officer determined that we owed a debt that clearly we did not owe.

[00:18:04] Speaker 06:
It was not owed by us.

[00:18:05] Speaker 06:
We don't think it's owed by anyone, according to the available evidence, but even if it was owed by anyone, it's owed by Iraq, and it's between Iraq and the United States.

[00:18:13] Speaker 06:
If a court that looks at that and says, absolutely, agility, you're right, but I'm powerless to do anything about it,

[00:18:18] Speaker 06:
because the determination has been made that there should be an offset.

[00:18:23] Speaker 06:
That's the end of your case.

[00:18:24] Speaker 06:
If that's where the Debt Collection Act leaves us, it is, in my respectful submission, patently unconstitutional.

[00:18:31] Speaker 06:
I don't think that's a plausible reading of what the Congress intended.

[00:18:35] Speaker 06:
The U.S.

[00:18:35] Speaker 06:
government has never, as far as we can tell, construed the Debt Collection Act that way.

[00:18:40] Speaker 06:
No court has ever construed the Debt Collection Act that way.

[00:18:43] Speaker 06:
And even here, at this point, Judge Stold, they are not

[00:18:46] Speaker 06:
saying that this would be the end of the case.

[00:18:49] Speaker 06:
They're saying, well, and we submit maybe a shell game, but we should go to the D.C.

[00:18:53] Speaker 06:
District Court and make our arguments there as to why the determination was substantively wrong.

[00:18:57] Speaker 00:
Can I ask one question on this procedural front?

[00:18:59] Speaker 00:
Suppose you're right that procedures weren't followed.

[00:19:02] Speaker 00:
What benefit do you get out of that?

[00:19:04] Speaker 00:
Why can't the government just go now and follow them

[00:19:07] Speaker 00:
in a way that you would find in compliance with the law and do the exact same bookkeeping subtraction that it's already done.

[00:19:17] Speaker 06:
Two reasons why.

[00:19:19] Speaker 06:
The first is if all we get is procedural protection of Judge Toronto, if that's all we get under the Debt Collection Act, we think that every I should be dotted and every T should be crossed because that's the bare minimum that the plain terms of the statute and title is due.

[00:19:30] Speaker 06:
So that's a formalistic argument.

[00:19:32] Speaker 06:
But the second argument, the more optimistic and substantive argument,

[00:19:34] Speaker 06:
Even the United States government can be shamed sometimes.

[00:19:37] Speaker 06:
And if we can go through the documents contemporaneously and demonstrate what I think we might have been able to demonstrate, might still be able to demonstrate.

[00:19:45] Speaker 00:
So you want to persuade them that you don't actually owe the 80?

[00:19:47] Speaker 06:
And that they know it.

[00:19:48] Speaker 06:
And that they know it.

[00:19:49] Speaker 06:
This is all a post hoc rationale prepared for this court and the Court of Federal Claims.

[00:19:54] Speaker 02:
OK.

[00:19:54] Speaker 02:
Let's hear from the other side now.

[00:20:12] Speaker 04:
Good morning.

[00:20:12] Speaker 04:
May I please the court?

[00:20:14] Speaker 04:
Your honors, please.

[00:20:15] Speaker 04:
Just a quick question before you go on.

[00:20:18] Speaker 02:
The money that agility received that's in question here, who paid that money?

[00:20:25] Speaker 02:
The Iraqi taxpayer or the U.S.

[00:20:27] Speaker 02:
taxpayer?

[00:20:28] Speaker 05:
for these task orders that are in question, the United States taxpayer.

[00:20:31] Speaker 05:
This was money that, if we follow the appropriations trail, was appropriated for the reconstruction of Iraq and given to the Department of Defense for that purpose.

[00:20:44] Speaker 05:
As far as we can tell, because frankly it's very difficult to read the appropriations lines in the Joint Appendix, it's all numbers and letters all combined together, but we've been able to trace it to a certain point to understand that the United States Army Corps of Engineers

[00:20:57] Speaker 05:
paid the money, it was their appropriated funds, and the contracting officer, who was an American, paid the money to Agility.

[00:21:05] Speaker 00:
On behalf of Iraq?

[00:21:06] Speaker 05:
For the contract, yes, for the Iraqi contract.

[00:21:09] Speaker 00:
Right, so your government can give money to a foreign government, which then enters into a contract, and the fact that it's U.S.

[00:21:15] Speaker 00:
funds, why should that be dispossessed?

[00:21:19] Speaker 00:
So, for example, take this situation.

[00:21:21] Speaker 00:
So, my neighbor needs a new roof.

[00:21:24] Speaker 00:
Right.

[00:21:25] Speaker 00:
The neighbor goes out and gets a roofer, enters into a contract.

[00:21:29] Speaker 00:
Neighbor tells me, I'm a little short on cash.

[00:21:32] Speaker 00:
Can you help out?

[00:21:33] Speaker 00:
So I say, sure, I'll pay.

[00:21:36] Speaker 00:
I'll actually fund this for you.

[00:21:38] Speaker 00:
And I decide, geez, my roof needs replacement, too.

[00:21:42] Speaker 00:
So I enter into a separate contract with the roofer.

[00:21:46] Speaker 00:
Before I pay the roofer on my house, I learned from my neighbor that I think I overpaid to the roofer.

[00:21:55] Speaker 00:
There's a problem with the roofer.

[00:21:56] Speaker 00:
Can I actually subtract that amount from the amount I owe on my roof?

[00:22:02] Speaker 05:
We can certainly try to, Your Honor, yes.

[00:22:03] Speaker 00:
You think the law is there any case in history that has allowed that kind of offset?

[00:22:12] Speaker 03:
Well, there's two things about that.

[00:22:14] Speaker 00:
I don't pay the roofer for the only contract I have with the roofer because I used my money to help my neighbor pay his contract.

[00:22:23] Speaker 05:
Right.

[00:22:24] Speaker 05:
I understand, Your Honor, and I want to understand.

[00:22:26] Speaker 00:
That is the situation, right?

[00:22:27] Speaker 05:
The scenario that we have here is a very complicated one.

[00:22:29] Speaker 00:
That is the situation, right?

[00:22:31] Speaker 05:
No, it's not.

[00:22:32] Speaker 05:
Because in this situation, what we had was an appropriations of funds by Congress for a certain purpose, the reconstruction of Iraq.

[00:22:39] Speaker 05:
It wasn't a gift to Iraq.

[00:22:41] Speaker 05:
I think the situation you're describing is giving your fear.

[00:22:44] Speaker 00:
Here's my problem.

[00:22:45] Speaker 00:
You did not assert anywhere in your brief, as far as I can tell,

[00:22:49] Speaker 00:
Here is why there is a legal obligation running between agility and me based on appropriations or anything else.

[00:22:58] Speaker 00:
You said the fact that it is U.S.

[00:23:00] Speaker 00:
money is the only thing we're relying on.

[00:23:03] Speaker 00:
That's my roof, for example, and I do not understand how that could be a basis for an offset.

[00:23:08] Speaker 05:
Well, it's the text of the DCA, Your Honor.

[00:23:10] Speaker 05:
The plain text of the DCA.

[00:23:12] Speaker 00:
Correct.

[00:23:13] Speaker 00:
Do you have any case outside the DCA, and then we'll get to the DCA, where my hypothetical would allow that simply because I used my cash to help another contractor?

[00:23:25] Speaker 05:
I would say that the US v. Wirtz, the traditional common law collections case, just says in it that if the United States overpays somebody by mistake, that is something that can be collected.

[00:23:35] Speaker 00:
On an obligation generated from programs?

[00:23:38] Speaker 00:
Correct.

[00:23:39] Speaker 03:
Correct.

[00:23:39] Speaker 03:
That's what offsets are.

[00:23:40] Speaker 00:
They're on a different obligation.

[00:23:42] Speaker 00:
I'm sorry.

[00:23:42] Speaker 00:
But you have not identified any obligation running between the United States and agility, except on the

[00:23:54] Speaker 03:
I mean, we are based on our argument here.

[00:23:58] Speaker 00:
I'm going to take it from your answer that nowhere in any offset law has there ever been such a payment, but you say the DCA changes that and allows the United States to do that.

[00:24:10] Speaker 05:
The United States overpaid agility, United States funds, and it's collecting it through an offset.

[00:24:16] Speaker 00:
Now you're just repeating yourself.

[00:24:18] Speaker 00:
Well, yes, but that's our argument.

[00:24:20] Speaker 00:
Respectfully, Your Honor.

[00:24:21] Speaker 00:
What evidence is there that Congress meant the DCA to provide an offset substantive right radically different from any that has ever existed in offset law?

[00:24:31] Speaker 05:
I don't think this is radically different, Your Honor.

[00:24:33] Speaker 05:
This is money that was paid by a United States officer.

[00:24:36] Speaker 00:
In my roofer example, put aside the DCA, would offset ever be allowed?

[00:24:41] Speaker 00:
I don't have to pay my roofer because I gave my money to my neighbor to pay his roofer.

[00:24:47] Speaker 05:
And I think the difference between what I'm announcing to you, Your Honor, and your example is that in that scenario, you believe that the United States saying that the money going to be used for this contract or you saying that the money is going to be used for your neighbor transforms that money into Iraqi money or transforms it into your neighbor's money.

[00:25:05] Speaker 05:
Our position is that no such transformation occurred.

[00:25:08] Speaker 05:
That this remained money that was appropriated to the Department of Defense for use in the reconstruction of Iraq.

[00:25:14] Speaker 05:
It was not given to Iraq as a gift, if you will, of here's $1 million, spend it on anything you want.

[00:25:22] Speaker 05:
It was controlled by the Army Corps of Engineer in the sense that they were paying it.

[00:25:26] Speaker 05:
It was still United States money.

[00:25:27] Speaker 00:
Why was the United States paying money on agilities

[00:25:34] Speaker 00:
contractual services with Iraq.

[00:25:37] Speaker 05:
But when the transition from the coalition provisional authority occurred, the defense fund for Iraq, I believe, was running dry, Your Honor.

[00:25:47] Speaker 05:
The money to do this contract needed to come from somewhere, and Congress determined that it would come from appropriate funds.

[00:25:53] Speaker 00:
So it was helping Iraq meet an obligation that Iraq incurred

[00:25:58] Speaker 00:
by contracting with agility for agility to provide a whole lot of services.

[00:26:03] Speaker 05:
Right.

[00:26:03] Speaker 05:
And I think that the difference between what we're saying is whose money is it?

[00:26:07] Speaker 05:
Now the question of whether the debt itself is valid, and that's really what we're arguing about here, is this debt valid?

[00:26:15] Speaker 05:
is a question that Agility has put forth.

[00:26:17] Speaker 00:
No, I think the question is, does the debt run to the United States from Agility?

[00:26:23] Speaker 00:
Agility has a debt on the assumption that there's an $80 million deficit, but what is, I think, undisputed is that it's not a debt to the United States.

[00:26:34] Speaker 05:
I apologize, Your Honor, but the contracting officer said that this is a debt to the United States.

[00:26:41] Speaker 00:
The contracting officer can say anything he wants in the letter, but I take it that the legal landscape that we've established here is that the only legal obligation Agility had outside the DCA is to Iraq.

[00:26:56] Speaker 05:
I'm sorry, the only legal obligation they had to them?

[00:26:59] Speaker 00:
With respect to the $80 million.

[00:27:01] Speaker 05:
No, the contracting officer determined it was a debt owed to the United States, Your Honor.

[00:27:04] Speaker 05:
That's what these documents show.

[00:27:06] Speaker 05:
Now, Jilly disagrees with that.

[00:27:08] Speaker 05:
You know, we understand that there was a big gulf between our positions on that, whether or not Mr. Woodstock, the contracting officer, when he issued these final demand limits, was correct.

[00:27:20] Speaker 00:
The contracting officer asked the question this way.

[00:27:23] Speaker 00:
Did the contracting officer said, here is the legal basis for not just that they owe $80 million, but that they owe it to us?

[00:27:33] Speaker 05:
The contracting officer said it was owed to us.

[00:27:34] Speaker 00:
Outside the DCA, right?

[00:27:35] Speaker 00:
A legal obligation outside the DCA.

[00:27:37] Speaker 00:
And what is the basis for that legal obligation?

[00:27:39] Speaker 05:
The contracting officer didn't specify a legal obligation beyond the fact that it was overpayment of United States funds.

[00:27:45] Speaker 00:
Right.

[00:27:45] Speaker 00:
OK.

[00:27:45] Speaker 00:
So the answer is there is none.

[00:27:47] Speaker 00:
It's entirely dependent on the legal obligation running from agility to Iraq under the law.

[00:27:52] Speaker 05:
Correct.

[00:27:53] Speaker 05:
That's what his role was as contract administrator was to make this sort of determination.

[00:27:57] Speaker 05:
He determined the money should be owed to the United States since the United States is the party that paid the money.

[00:28:01] Speaker 00:
And under the restatement or anywhere else, either restatement of agency or restatement of contracts, does an agent ever get to do that?

[00:28:09] Speaker 05:
That question should be answered in the district court.

[00:28:11] Speaker 05:
It hasn't been briefed below, Your Honor.

[00:28:12] Speaker 05:
The question of whether or not the debt that the contracting officer determined in the 12 final demand letters, whether it's valid or not, that is what the

[00:28:24] Speaker 05:
First statement is on the claim for relief in the 2016 district court case.

[00:28:29] Speaker 05:
Now, this complaint in the district court is a little bit old, because it predates your prior decision in 2008 on this matter.

[00:28:36] Speaker 05:
And it's sort of a backup complaint at this point.

[00:28:38] Speaker 05:
But at least part of this complaint is challenging the actual validity of the debt that the contractor officer should never have determined that Agility owes almost $81 million to the United States for various reasons.

[00:28:54] Speaker 05:
What agility has done is gone in the wrong direction here in its various different complaints.

[00:29:00] Speaker 05:
It came to the Court of Federal Claims and once it argues even today that the debt is otherwise illegal without first getting a judicial determination that the debt, the $81 million debt is actually illegal.

[00:29:13] Speaker 05:
If you work under the premise that there's been no determination of this debt being illegal, then the Debt Collection Act, by its terms, shows that there has been a claim, because inappropriate officials determined the money was owed to the United States, and that claim is an overpayment.

[00:29:27] Speaker 05:
What Agility should have done is gone to the district court first.

[00:29:32] Speaker 05:
got a determination that the United States should not have been, in their opinion, should not have been issuing final demand letters on a contract in which they were not privy to, and then the Debt Collection Act would not be applicable.

[00:29:47] Speaker 05:
because there would be no valid determination by an appropriate official.

[00:29:52] Speaker 05:
But they've done it backwards.

[00:29:53] Speaker 05:
What they've come in and said, don't use the DCA because we intend to show later that this is an invalid debt.

[00:30:00] Speaker 05:
And Your Honor, I understand your concerns, but I believe your concerns are about whether the debt of the original of the validity of that debt.

[00:30:06] Speaker 00:
Let me just be clear.

[00:30:07] Speaker 00:
I would assume that $80 million is owed.

[00:30:10] Speaker 00:
What I don't see the literally the slightest basis for is the idea that it's owed from agility

[00:30:16] Speaker 00:
to the United States.

[00:30:18] Speaker 05:
Well, then I would say, Your Honor, you don't assume that the debt is owed.

[00:30:22] Speaker 05:
The premise of coming into this case, if they haven't challenged the debt to the United States, is that the debt is to the United States as well.

[00:30:30] Speaker 00:
I understand your... I'm sorry, I thought the basis for their challenge to the DCA ruling, as well as their successful challenge to the common law, was that if there's a debt, it's not from us to the United States.

[00:30:43] Speaker 00:
It's from us to Iraq, if there is one.

[00:30:45] Speaker 05:
And what the trial court held was that if you look at the terms of the DCA, if the appropriate official makes the determination, then you can collect under that collection act.

[00:30:56] Speaker 05:
The plain meaning of that statute, Your Honor.

[00:30:58] Speaker 02:
Whether the money is owed to the U.S.

[00:31:00] Speaker 02:
or to Iraq, there's been an overpayment.

[00:31:04] Speaker 02:
Correct, Your Honor.

[00:31:06] Speaker 02:
And the US Congress appropriated funds for the reconstruction of Iraq.

[00:31:12] Speaker 02:
It's those funds that were being used to pay agility at some point, whether it was through the US or Iraq.

[00:31:19] Speaker 02:
Correct?

[00:31:19] Speaker 02:
Yes.

[00:31:21] Speaker 02:
And it's a misuse.

[00:31:22] Speaker 02:
When there's an overpayment, then it can be said that those payments were not made for the specific purpose for which they were appropriated.

[00:31:33] Speaker 02:
Correct.

[00:31:35] Speaker 02:
One way or the other, whether the debt is owed by Iran or to the United States, there's been an overpayment, and the DCA allows for a claim of an overpayment.

[00:31:48] Speaker 05:
By the plain terms of the DCA, correct, Your Honor?

[00:31:50] Speaker 05:
Yes.

[00:31:53] Speaker 05:
And to be clear about our common law argument, Your Honor, that is a backup argument in the event that the procedures of the DCA were not followed.

[00:32:04] Speaker 05:
The common law does allow the collection.

[00:32:07] Speaker 05:
That is the HSH Nordbank case that we cite in our briefing.

[00:32:14] Speaker 01:
But just to be clear, you're not relying on that basis to support your DCA claim.

[00:32:20] Speaker 01:
Your DCA claim is separate.

[00:32:22] Speaker 01:
And you're saying just under the language of the statute, the definition of that claim is separate.

[00:32:27] Speaker 05:
If you look at the documents that have been appended to the pleadings, Your Honor, and included in the joint appendix, this was a debt collection act collection.

[00:32:35] Speaker 01:
Do you have any examples, whether it's case law or there's some reference in the statute to an executive order relating to, you know, the government somehow using this statute to collect payment from parents who are not providing child support?

[00:32:51] Speaker 01:
Do you have any examples at all that support your position?

[00:32:55] Speaker 05:
You know, any example that we could find of the use of DCA just wasn't comparable to this situation.

[00:33:02] Speaker 05:
This is a very, very unique situation.

[00:33:05] Speaker 05:
And it's made briefing, I'm sure, for both parties difficult because of what actually occurred back in 2003 with this contract, the letting of it, the different roles of the different governments in this.

[00:33:17] Speaker 05:
There was nothing that was an apt comparison, Your Honor.

[00:33:23] Speaker 05:
Regarding the request by Agility to have a remand to go through the procedures, what Agility argued below was in their opinion procedures weren't followed so therefore the Debt Collection Act was never used.

[00:33:37] Speaker 05:
That was their argument below.

[00:33:39] Speaker 05:
What they did not do below was give to the trial court an argument as to why the notifications they did receive were insufficient to meet the requirements of the Debt Collection Act.

[00:33:51] Speaker 05:
A request now for a remand to go through that process is piecemeal litigation.

[00:33:56] Speaker 05:
Absolutely.

[00:33:58] Speaker 05:
They did, but how am I supposed to... Oh, sorry, please.

[00:34:01] Speaker 01:
And then I think in response to that, you provide the letters that we have in the appendix, right?

[00:34:06] Speaker 05:
That's correct.

[00:34:07] Speaker 05:
And then it was their job to say why those letters are insufficient.

[00:34:10] Speaker 05:
They didn't do that.

[00:34:11] Speaker 05:
They didn't give the trial court an opportunity to rule in another way.

[00:34:15] Speaker 01:
On a summary decision, you don't think that it was enough for them to say, here's the statutory provision, here's the letters.

[00:34:23] Speaker 01:
The letters don't satisfy those provisions.

[00:34:25] Speaker 05:
Not when our answer is, yes, they do.

[00:34:27] Speaker 05:
They need to say, no, they don't.

[00:34:29] Speaker 01:
And I can tell you the appendix.

[00:34:30] Speaker 01:
Sorry, please.

[00:34:31] Speaker 01:
Maybe you could have explained why they satisfied the provisions.

[00:34:34] Speaker 01:
I mean, who had the burden to show that they were satisfied?

[00:34:38] Speaker 05:
Well, the allegation on their part was that they were not satisfied, and they were very plainly not... The documents that they placed into the record and their pleadings were missing these letters.

[00:34:48] Speaker 05:
They weren't attached.

[00:34:49] Speaker 05:
When we placed them in, we were completing what the pleadings should show.

[00:34:53] Speaker 05:
And we can tell you right now that if going through 31 USC 3716 and the different procedures... Show me where number four was met, an opportunity to make a written agreement with the head of an agency to repay the amount of

[00:35:08] Speaker 05:
So there's two instances of that, Your Honor.

[00:35:12] Speaker 05:
The first instance of that is appendix page 1663.

[00:35:17] Speaker 05:
And I'm looking through the wrong binder.

[00:35:26] Speaker 05:
1663?

[00:35:27] Speaker 05:
Correct, Your Honor.

[00:35:29] Speaker 05:
And this is the original debt letter.

[00:35:34] Speaker 05:
So to be clear, the requirement that we're talking about here is the opportunity to make a written agreement with the head of the agency to repay the amount of the claim.

[00:35:44] Speaker 05:
And there's two things here that I would like to point out.

[00:35:47] Speaker 05:
Towards the bottom of 1663, the second to last paragraph,

[00:35:51] Speaker 05:
Quoting it, if you believe the debt is invalid or the amount is incorrect, please contact the undersigned immediately.

[00:35:57] Speaker 05:
So that's telling, let us know if you think this is wrong.

[00:36:00] Speaker 05:
The next paragraph is, if you are financially unable to pay the full amount of the debt at the present time, you may request an installment plan agreement.

[00:36:08] Speaker 05:
So right there is an offer to make a settlement to pay this off slowly as opposed to an offset.

[00:36:15] Speaker 05:
The second instance I have written down here, Your Honors, and what I've done just to explain to you is I have 3716 in front of me and I have appendix pages marked next to all of this because simply this wasn't briefed below.

[00:36:30] Speaker 01:
These issues weren't really decided about, right?

[00:36:34] Speaker 05:
They weren't raised.

[00:36:35] Speaker 05:
Yeah, I would say they weren't decided because they weren't raised.

[00:36:36] Speaker 05:
I don't fault the trial court for that.

[00:36:38] Speaker 05:
It's incumbent upon a plaintiff.

[00:36:40] Speaker 00:
This is on the procedural requirements that we're talking about?

[00:36:43] Speaker 05:
These are the procedural requirements, yes.

[00:36:44] Speaker 00:
I thought Judge Wheeler had a paragraph that actually ruled on it.

[00:36:47] Speaker 00:
Because, right.

[00:36:50] Speaker 00:
Yes, please, Your Honor, I apologize.

[00:36:52] Speaker 00:
Isn't the rule about forfeiture that you don't fork?

[00:36:55] Speaker 00:
You get to raise on appeal an argument that was either raised below or ruled on, and this one was ruled on.

[00:37:01] Speaker 03:
Well, this was ruled on, yes.

[00:37:02] Speaker 05:
So it doesn't really matter whether... Well, I think their argument below was that none of the procedures were followed.

[00:37:08] Speaker 05:
And Judge Wheeler seized these documents and agreed the procedures were followed.

[00:37:12] Speaker 05:
And they didn't raise arguments why specifically page 1663 doesn't apply, why page 2173 that I'm stating to you now is insufficient.

[00:37:20] Speaker 01:
Where is there something addressing the opportunity to inspect and copy records of the agency relating to the claim?

[00:37:27] Speaker 05:
They were given all the records, Your Honor.

[00:37:29] Speaker 05:
So I would say that there is nothing explicitly stating in the documents, I'm going to give you all the records, but the records were given to them.

[00:37:37] Speaker 01:
And these are... What about the opportunity for review within the agency, the decision of the agency?

[00:37:43] Speaker 05:
Opportunity for review.

[00:37:44] Speaker 05:
That is also the 1663, if you disagree with me, language.

[00:37:48] Speaker 05:
And also there is an opportunity for a written appeal discussed on 2173.

[00:37:58] Speaker 02:
What about a written agreement with the head to repay the amounts?

[00:38:02] Speaker 02:
I know we've asked this already, but you've just shown to discuss this or to address it, but where is there notice for the opportunity to enter into a written agreement?

[00:38:14] Speaker 05:
the the language on 1670 1663 excuse me about installment plan your honor I assume the installment plan would be written okay and then there's on 2173 in the last paragraph the second sentence if after hearing the explanation you believe you do not owe the debt or that the you owe an amount other than what is shown on the enclosed bill you may submit a written appeal to the division chief

[00:38:46] Speaker 05:
if the court has no further questions.

[00:38:48] Speaker 05:
Oh, just one comment about that.

[00:38:50] Speaker 05:
I think there was a statement while my colleague was going that, where does this get you if the procedures weren't followed?

[00:39:01] Speaker 05:
It doesn't really get them anywhere, right?

[00:39:04] Speaker 05:
They were aware of this whole time this offset was occurring.

[00:39:07] Speaker 05:
They were aware that they disagreed with it.

[00:39:09] Speaker 05:
They chose specific ways to challenge this, first going to the ASPCA, and then going to this Court in the Debt Collection Act, and then holding the District Court in reserve.

[00:39:20] Speaker 05:
Agility has not been blindsided by anything.

[00:39:23] Speaker 02:
The Court has... Why haven't we seen the argument here about unjust and rich?

[00:39:28] Speaker 02:
Why haven't two words there?

[00:39:30] Speaker 05:
I believe there was an unjust enrichment argument.

[00:39:33] Speaker 05:
The other way around.

[00:39:34] Speaker 02:
The other way around.

[00:39:35] Speaker 05:
Below.

[00:39:36] Speaker 05:
Correct.

[00:39:37] Speaker 05:
And it was discussed below that they have this $81 million that does not belong to them.

[00:39:43] Speaker 05:
But I think it would also depend on who the debt is owed to.

[00:39:48] Speaker 05:
Who has been denied the enrichment because they're unjustly rich.

[00:39:53] Speaker 02:
So that's why there hasn't been a... If you feel that the debt was owed to you, why didn't you make the argument?

[00:40:00] Speaker 00:
They would have lost the earlier case.

[00:40:02] Speaker 01:
I'm sorry, Your Honor.

[00:40:03] Speaker 01:
Why didn't you challenge, as part of your DCA claim, say that the legal justification for it is unjust enrichment?

[00:40:10] Speaker 01:
I think that's the question.

[00:40:11] Speaker 05:
Well, the documents do say DCA.

[00:40:13] Speaker 05:
That's why we pursued on the DCA, Your Honor.

[00:40:16] Speaker 01:
As a backup argument.

[00:40:18] Speaker 01:
Under the common law, why not rely on unjust enrichment?

[00:40:22] Speaker 05:
well i mean get basically that is what common-law offsetting is just a little you have money that doesn't belong to belongs to us we take it back to our backup argument of the common law while we didn't send just a rich man is the same analysis if you will thank you

[00:40:42] Speaker 02:
Mr. Schaeffer, I'm putting you back at five minutes for your... Thank you, Your Honor.

[00:40:46] Speaker 06:
We appreciate that.

[00:40:46] Speaker 06:
Let me just quickly say, Judge Sol, if it had been unjust enrichment, there'd be a fair fight about that.

[00:40:50] Speaker 06:
We would be able to address that under the common law just as one would and show, in fact, we weren't unjustly enriched.

[00:40:55] Speaker 06:
We were underpaid.

[00:40:56] Speaker 06:
And that would... there would be the opportunity, presumably, to offer that showing to Judge Wheeler.

[00:41:00] Speaker 06:
We never had that opportunity in that court or any other court.

[00:41:03] Speaker 02:
Isn't that argument, though, raised the specter of a contractual right outside of the DCA?

[00:41:10] Speaker 06:
But, Your Honor, I think that it is common ground that there's no such contractual right, because the United States was not a party to that contract.

[00:41:17] Speaker 06:
But you asked the question, weren't these United States funds?

[00:41:20] Speaker 06:
That's how you started with Mr. Bernalde.

[00:41:21] Speaker 06:
And I just want to emphasize what you were hearing, what this court was hearing from the United States and from Mr. Bernalde the last time around, because there were questions about whether the United States, through its conduct, through task orders, through novations of the PCO contract, had assumed party status.

[00:41:36] Speaker 06:
And the United States said, basically, that you should not

[00:41:40] Speaker 06:
consider these United States monies in terms of the legal characterization because money is fungible.

[00:41:45] Speaker 06:
And it was paid on behalf of the Iraqi government.

[00:41:48] Speaker 06:
We can see that in the argument transcript.

[00:41:49] Speaker 06:
It was specifically quoted.

[00:41:51] Speaker 06:
So when Mr. Grimaldi says there was no transformation of these funds into Iraqi funds, actually he was submitting exactly the opposite to this court, that for all legal purposes, Judge Toronto, these were Iraqi funds.

[00:42:03] Speaker 02:
One way or the other, whether they paid through the United States or through Iraq, those funds were supposed to have been paid for the reconstruction efforts.

[00:42:11] Speaker 02:
Very specific expenditures.

[00:42:14] Speaker 06:
And it makes all the difference though, Judge Raina, because then if an Iraqi court were to determine that in fact there had been a quote unquote overpayment, then that could set up some sort of a dispute.

[00:42:25] Speaker 06:
It's an essential premise of it.

[00:42:26] Speaker 06:
No Iraqi court is so determined.

[00:42:28] Speaker 06:
In fact, the United States has conceded that they are

[00:42:31] Speaker 06:
claiming this money without input from Iraq, without Iraq contending that there was any sort of an overpayment, and they also concede, Judge Reina, they explicitly conceded our allegation, I think it's in paragraph 129 of the complaint, and in their answer, they concede they are not repaying these monies to Iraq.

[00:42:48] Speaker 06:
This is not part of any internal accounting for Iraq, they're not recovering them on behalf of Iraq, and they have no authorization from Iraq.

[00:42:55] Speaker 06:
to claim that there was anything that agility failed to do under the PCO contract or anything that agility was overpaid.

[00:43:01] Speaker 06:
So they have completely changed their position.

[00:43:05] Speaker 06:
Their premises and their legal submissions are exactly the opposite of what they successfully convinced the court of last time around.

[00:43:12] Speaker 06:
I think that that matters to the correct analysis of whether there's any obligation or any debt that flows from agility to the United States.

[00:43:19] Speaker 06:
I think it's important to that Judge Toronto.

[00:43:21] Speaker 06:
But even if your honors weren't persuaded of that, this is a paradigmatic case for judicial estoppel.

[00:43:27] Speaker 06:
And one of the problems that would result from a holding in favor of the United States is that no one denies, Judge Raina, that Iraq was the principal to the contract.

[00:43:35] Speaker 06:
And so if there were overpayments under the contract, it is Iraq's claim, and agility would have double exposure.

[00:43:42] Speaker 06:
Iraq could come after them for these same monies.

[00:43:44] Speaker 06:
I'm sorry, Judge.

[00:43:45] Speaker 01:
I heard you say just a moment ago that they're arguing inconsistently, but what about the fact that the first agility case expressly says that each of the task orders at issue there obligated U.S.

[00:44:03] Speaker 01:
funds?

[00:44:04] Speaker 06:
There's no question that the United States government, as a contracting agent, was paying monies to Agility.

[00:44:10] Speaker 06:
But the key question is, what is the correct legal characterization of those monies?

[00:44:14] Speaker 06:
Judge Toronto's hypothetical about the roof, I submit, is exactly right.

[00:44:19] Speaker 06:
And the correct legal characterization of those monies when they're paid from one homeowner on behalf of the other homeowner is it's the homeowner who has the contract with the roofer who's getting the benefit of those monies.

[00:44:29] Speaker 06:
And the United States has foreign aid all over the world.

[00:44:32] Speaker 06:
But it does not follow from that, that because United States monies are paid out to a foreign government, and the foreign government is undertaking a contract using those monies, that the United States holds the claim as though it were the contracting party.

[00:44:44] Speaker 06:
All law to this point.

[00:44:46] Speaker 06:
Every decided case and the restatement on which this court relied establishes that there's no legal claim that the agent has against the contracting counterparty.

[00:44:54] Speaker 06:
nor does the agent have liability.

[00:44:56] Speaker 06:
Those two things rise or fall together, and this court held last time that the United States does not have liability under this contract.

[00:45:03] Speaker 06:
The last thing I want to address is the notion that we've just done it wrong, Your Honors.

[00:45:07] Speaker 06:
We went to the wrong court first.

[00:45:09] Speaker 06:
The United States has successfully argued up and down all around the country and persuaded this court that when someone files an APA suit,

[00:45:17] Speaker 06:
seeking declaratory relief, seeking an injunction.

[00:45:21] Speaker 06:
If the bottom line of that is that it implicates money damages that the United States would owe, particularly in connection with the contract, that suit belongs in the Court of Federal Claims coming up to this Court.

[00:45:31] Speaker 06:
And this Court has jealously protected its jurisdiction at the United States' urging.

[00:45:36] Speaker 06:
To now have the United States have it the other way and say it's really the dogging up the tail that should be adjudicated through the DDC and an APA action totally reverses and upends this court's carefully established precedent.

[00:45:49] Speaker 06:
We don't think that that makes any sense, especially when you have such claim splitting inefficiency and a loss of this court's control over cases like this that involve claims for contractual monies owed by the United States.

[00:46:00] Speaker 02:
We thank you for your arguments.

[00:46:01] Speaker 02:
We thank all the parties for their arguments today.

[00:46:04] Speaker 02:
This court now goes into recess.

[00:46:05] Speaker 02:
Thank you.