[00:00:01] Speaker 03: case for argument is 19-2060, Lee versus United States. [00:00:07] Speaker 03: Ms. [00:00:07] Speaker 03: Moore-Leonhardt, whenever you're ready. [00:00:10] Speaker 05: Thank you, Your Honor. [00:00:13] Speaker 05: Good morning, Your Honors. [00:00:14] Speaker 05: I am Mary Alice Moore-Leonhardt, and I represent Dr. Sinhang Lee. [00:00:20] Speaker 05: In the amended complaint, which is at Appendix 838, we believe Dr. Lee has plausibly alleged that there was an offer, acceptance, and actual authority by the CDC. [00:00:31] Speaker 05: This is obviously the basis of the Court of Federal Claims decision and our focus today. [00:00:37] Speaker 05: Simply put, what was the offer? [00:00:41] Speaker 05: The offer was extended by the CDC to Dr. Lee to enter into a nationwide research project for the purpose of finding a practical and reliable test for the diagnosis of early Lyme disease. [00:00:56] Speaker 05: The specific details included using Dr. Lee's [00:01:00] Speaker 05: PCR DNA sequencing test for Lyme disease as the comparative test against which other tests from selected sources would be measured. [00:01:10] Speaker 05: This is what is meant by the term gold standard as used in the amended complaint at paragraph 35. [00:01:17] Speaker 03: Paragraph 40. [00:01:18] Speaker 03: I'm sorry. [00:01:19] Speaker 03: Let me interrupt you. [00:01:21] Speaker 03: What do you point to in your complaint [00:01:25] Speaker 03: that says that you're claiming he breached an agreement to approve his technology as the gold standard for Lyme disease. [00:01:33] Speaker 03: Transfer it to hospital laboratories or pursue a field trial with it for further validation. [00:01:40] Speaker 03: You're seeking $57 million in damages for that. [00:01:44] Speaker 03: Where is the alleged offer to approve his technology as the gold standard for Lyme disease diagnosis? [00:01:53] Speaker 03: Okay. [00:01:54] Speaker 05: Your Honor, I would invite you to paragraph 16 of the amended complaint, which in essence sets forth the offer that was extended to Dr. Lee. [00:02:09] Speaker 05: And the offer was that Dr. Lee would engage in a research study with the CDC that would be conducted on a nationwide basis. [00:02:19] Speaker 05: And as part of the study, Dr. Lee's test [00:02:23] Speaker 05: would be utilized as the gold standard. [00:02:25] Speaker 05: In other words, other tests which would be solicited by the CDC would be conducted and the testing technology and the results of those tests would be measured against Dr. Lee's PCR DNA sequencing technology test and the accuracy of his results. [00:02:46] Speaker 05: So that was the offer and as part of that offer, [00:02:51] Speaker 05: It was contemplated by the parties that Dr. Lee's test would be taken through a couple of rounds of reliability testing, and then the parties would, depending on if the results were favorable, the parties would then collaborate and draft a protocol. [00:03:09] Speaker 05: The protocol, if you will, would be used as the manual, so to speak, for the implementation. [00:03:18] Speaker 03: I'm hearing your words, but I guess [00:03:20] Speaker 03: I'm focusing on paragraph 16 of the complaint. [00:03:23] Speaker 03: It's at 841 of the appendix, right? [00:03:25] Speaker 03: If I got the right paragraph. [00:03:26] Speaker 03: That's correct. [00:03:27] Speaker 03: All right. [00:03:28] Speaker 03: And I'm comparing that to the public conference statement, which is one of the things you say constituted the offer. [00:03:39] Speaker 03: And I'm not seeing how one maps on to the other. [00:03:44] Speaker 03: A statement made at a conference [00:03:47] Speaker 03: of the entire conference maps on to what your allegation is in paragraph 16. [00:03:55] Speaker 03: Do you understand my problem? [00:03:58] Speaker 05: I do, Your Honor, and I respectfully would like to clarify what appears to be some confusion about the import of the public statement that you're referring to in paragraph 13. [00:04:08] Speaker 05: This statement in and of itself does not represent the CDC contract offer for the research project, rather, [00:04:16] Speaker 05: This statement led to a dialogue between the parties, an expression of interest. [00:04:21] Speaker 05: It was an invitation, if you will. [00:04:23] Speaker 05: There was an expression of interest. [00:04:25] Speaker 05: There were discussions between Dr. Lee and the CDC that led up to the formal offer by the CDC for Dr. Lee to be the principal researcher assisting the CDC to conduct the research project, which is described not only in paragraph 16, but also in the protocol [00:04:45] Speaker 05: the study protocol which is referred to in paragraph 40 at appendix 847 and can be found in attachment 16 and 17 to the amended complaint. [00:05:00] Speaker 05: The goal of the study again was to identify the most reliable test for early detection of Lyme disease so then consumers could be early diagnosed and then treated properly. [00:05:14] Speaker 01: Counsel, this is Judge Raito. [00:05:17] Speaker 01: So you're saying that there was an agreement that Dr. Lee would undertake the study. [00:05:23] Speaker 01: And I looked in the record, and I can't find it. [00:05:26] Speaker 01: I just couldn't find it. [00:05:28] Speaker 01: But who paid Dr. Lee's cost up to this point? [00:05:35] Speaker 05: Dr. Lee. [00:05:38] Speaker 05: Dr. Lee. [00:05:40] Speaker 01: There's no inference that the CDC would be responsible for any of the costs related to the study. [00:05:51] Speaker 05: I think the inference was that once the study proceeded, there might be a grant that was issued to cover Dr. Lee's costs, and I believe there is an allegation in the complaint that addresses that, that there was a representation made to him. [00:06:10] Speaker 05: that they're in paragraph 21 by Dr. Schreifer, that Dr. Lee would likely receive a grant as the work went forward. [00:06:20] Speaker 05: But I'd like to just take you back, if I may, to the essence of the offer. [00:06:25] Speaker 02: The underlying course... Also, this is... Council, this is Judge Stoll. [00:06:29] Speaker 02: I'm sorry to interrupt you. [00:06:30] Speaker 02: I know you can get back to that in a minute, but I'd just like you to answer one quick question, which is you had referred us to index page 847 [00:06:39] Speaker 02: and paragraph 40 and to attachment 16 and 17 to the amended complaint. [00:06:46] Speaker 02: I don't see attachments 16 and 17 in the appendix before me. [00:06:50] Speaker 02: Am I incorrect to understand that those have not been provided to the court? [00:06:58] Speaker 05: Well, they are not in the court appendix before you, but they are in the master appendix to the amended complaint at attachments 17 and 18. [00:07:08] Speaker 05: pages 971 to 1017, and they are a part of the court record that is before you, Your Honor. [00:07:17] Speaker 02: Did you cite them or rely on them at all in your arguments on appeal? [00:07:21] Speaker 05: Yes, we did. [00:07:30] Speaker 03: May I proceed? [00:07:32] Speaker 03: Yes. [00:07:33] Speaker 03: Well, the last thing you said was he said he would likely get the grant. [00:07:37] Speaker 03: So your view was that he wasn't told he would get the grant, but he was told that he would likely get the grant? [00:07:44] Speaker 05: Well, that is correct. [00:07:46] Speaker 05: But I think the point of this case is that the contract wasn't about seeking a grant or securing the grant. [00:07:57] Speaker 05: The contract was an implied impact contract between the CDC and Dr. Lee to conduct this national study. [00:08:05] Speaker 05: The CDC would utilize Dr. Lee's test. [00:08:08] Speaker 05: There would be a protocol that was designed around utilizing that test and then identifying facilities and testing laboratories which would produce specimens and test the specimens, the results of which would be directly sent back to the CDC. [00:08:24] Speaker 05: That's all set out in those protocols that are at the master appendix of attachments 17 and 18. [00:08:31] Speaker 05: Our point with regard to the offer is that the CDC [00:08:35] Speaker 05: court did not seem to have considered in its analysis the impact of paragraphs 16, 17, and 18. [00:08:47] Speaker 05: And we believe that those paragraphs, along with paragraph 40, are an integral part of the analysis that leads up to whether or not there was a plausible offer [00:09:05] Speaker 05: as alleged by Dr. Lee and we believe that there was such a plausible offer. [00:09:11] Speaker 05: I'd like to move on since I'm running out of time to acceptance and direct your attention to paragraph 15 wherein it is alleged that Dr. Lee accepted the plan that needs to be taken in the context of paragraphs 13 and 14. [00:09:25] Speaker 05: The plan that was accepted is described in paragraph 16 and the CDC [00:09:31] Speaker 05: understood that Dr. Lee had accepted the plan for the research project when Dr. Schreifer commenced the research project by supplying the material samples to Dr. Lee under material agreement number one. [00:09:46] Speaker 05: Finally, with regard to actual authority, we believe Dr. Lee has plausibly alleged and implied in that contract. [00:09:52] Speaker 05: If I would invite you to review paragraphs 10, 11, 12, and 14, [00:09:59] Speaker 05: However, the point here that I'd like to make is that the CDC's challenge on this issue and the court's decision seem to relate to whether there's been sufficient evidence to support the allegation and that... You can finish your sentence. [00:10:20] Speaker 03: Go ahead. [00:10:21] Speaker 05: Thank you. [00:10:22] Speaker 05: That isn't what the intent of the... [00:10:25] Speaker 05: pleading stage at this point is all about. [00:10:29] Speaker 05: It should be about whether or not Dr. Lee has sufficiently alleged actual authority and I believe I've set it forth in my brief more than adequately in terms of the aggregate allegations as well as the MTA number one and MTA number two wherein Dr. Bell has been identified as the authorized official for the provider and both MTAs referred to the research project [00:10:55] Speaker 05: and not just a limited transfer of materials. [00:10:57] Speaker 05: And I think that more than sufficiently meets the standard and raises it from possible to plausible. [00:11:06] Speaker 05: And I would ask that we be permitted to pursue any challenges in the discovery phase. [00:11:14] Speaker 05: Thank you. [00:11:15] Speaker 03: We'll reserve the remainder of your time for rebuttal. [00:11:17] Speaker 03: Let's hear from the other side. [00:11:19] Speaker 05: Yes, I do. [00:11:26] Speaker 04: Good morning, Your Honor. [00:11:28] Speaker 04: Can everyone hear me? [00:11:34] Speaker 04: Yes. [00:11:34] Speaker 04: May it please the court? [00:11:36] Speaker 04: The elements of contract formation are well established and beyond dispute. [00:11:41] Speaker 04: You must have an offer, acceptance, a mutual intent to enter into a contract, and in the case for government contracts, actual authority vested with the government agent doing the contracting to bind the government to that contract. [00:11:56] Speaker 04: Each of these elements is mandatory. [00:11:58] Speaker 04: If any one is missing, then there can be no valid contract that is formed, no breach of contract, and the case is properly dismissed. [00:12:07] Speaker 04: In this case, the Court of Federal Claims carefully reviewed Dr. Lee's complaint. [00:12:12] Speaker 03: Okay, so let's start. [00:12:13] Speaker 03: Time is limited, so why don't we start with offer? [00:12:16] Speaker 03: And the other side seems to focus largely, if not exclusively, on paragraph 16 of the complaint. [00:12:25] Speaker 03: So why don't you turn to paragraph 16 and tell us why that's not sufficient? [00:12:30] Speaker 04: Your Honor, for several reasons. [00:12:32] Speaker 04: First of all, most notably, even if we accept on its face the agreements that Dr. Lee alleges in paragraph 16, those agreements do not track the breaches that he alleges. [00:12:45] Speaker 04: The agreements that are referenced in paragraph 16 have all been fully performed. [00:12:49] Speaker 04: The CDC undisputably provided samples to Dr. Lee. [00:12:54] Speaker 04: Dr. Lee undisputably tested those samples and prepared a protocol for continued testing of those samples. [00:13:01] Speaker 04: There is no agreement even alleged on the face of paragraph 16 that the CDC was then going to do anything subsequent with Dr. Lee's technology. [00:13:12] Speaker 03: For the record, maybe the last two sentences, is that what, for the last two sentences, which I think could have claimed to have said we're just competing, says the ultimate goal of the contract, blah, blah, blah, blah, blah. [00:13:26] Speaker 04: Certainly, Your Honor, and that is a legal conclusion. [00:13:29] Speaker 04: Dr. Lee certainly pleads that he believed he had a contract here, but under Iqbal and Twombly, that sort of legal conclusion [00:13:39] Speaker 00: Apologies. [00:13:40] Speaker 00: It appears that Chief Judge Prost has dropped from the call. [00:13:43] Speaker 00: I'm going to stop the recording and we'll connect Chief Judge Prost back. [00:13:48] Speaker 03: My apologies. [00:13:49] Speaker 03: I was dropped. [00:13:51] Speaker 03: Please continue. [00:13:52] Speaker 03: This is Sharon Graham. [00:13:53] Speaker 04: Your Honor, I believe we were discussing the concluding sentence of paragraph 16 of Dr. Lee's complaint where he alleges that the ultimate goal of the contract was to establish this test. [00:14:05] Speaker 04: And Your Honor, there's sort of several problems with that allegation. [00:14:09] Speaker 04: Most notably, that is a legal conclusion. [00:14:12] Speaker 04: And that is certainly Dr. Lee's conclusion in this case, but under Iqbal and Plombele, it is not sufficient to merely plead the elements of your case. [00:14:22] Speaker 04: You have to plead facts that would plausibly suggest the existence of such a contract. [00:14:27] Speaker 04: And Dr. Lee has failed to do that here. [00:14:30] Speaker 01: And I think... Well, counsel, let me ask you this question. [00:14:33] Speaker 01: This is Judge Raina. [00:14:35] Speaker 01: And this goes through what you're saying about the failure to allege. [00:14:40] Speaker 01: When we're being asked to see if there's any offer by the CDC to inform, to form the applied, in fact, contract. [00:14:50] Speaker 01: And the CDC, it's got to be shown to have unambiguously done this. [00:14:56] Speaker 01: Why is it that Dr. Lee's work, and it seems like it's quite extensive work in developing the testing protocols and his communications with the CDC personnel as to what he was doing, that kind of indicates to me that he's taking all this action on the promise that there's going to be a contract down the line. [00:15:21] Speaker 04: Well, Your Honor, I respectfully disagree. [00:15:23] Speaker 04: I think that Dr. Lee's interactions with the CDC in this case are of the nature that any researcher would have with the CDC if their work overlaps with the CDC's field of expertise. [00:15:35] Speaker 04: The CDC is a public health institution, and one of the things that they do is that they interact with members of the scientific community. [00:15:42] Speaker 04: They provide materials. [00:15:44] Speaker 04: They provide the benefit of their expertise. [00:15:47] Speaker 04: And that was the nature of Dr. Lee's interactions with the CDC. [00:15:52] Speaker 04: He is himself personally interested clearly in Lyme disease diagnosis. [00:15:57] Speaker 04: And the CDC is interested in encouraging that kind of work to develop. [00:16:02] Speaker 04: And so they have, for example, prepared this repository that they made available to Dr. Lee and anyone else who was a researcher in this field. [00:16:12] Speaker 04: And they sort of gave him the benefit of their expertise in terms of how he was developing this research. [00:16:19] Speaker 04: But that does not reach the level of an unambiguous author to endorse his technology or to work with Dr. Lee on his technology. [00:16:28] Speaker 04: And in that respect, you know, the MTAs that were signed are telling, Your Honor, in that [00:16:35] Speaker 04: The whole purpose of a material transfer agreement at the CDC is to provide materials and to provide things that would enable researchers to further their own research pursuits, but where the CDC is not personally getting involved in that research. [00:16:50] Speaker 04: And if the CDC had wanted to get involved with Dr. Lee's research and had wanted to [00:16:55] Speaker 04: actively participate or collaborate or develop that further. [00:16:58] Speaker 04: There are other ways that the CDC has established to do that. [00:17:02] Speaker 04: They have research collaborations. [00:17:04] Speaker 04: They have a product. [00:17:06] Speaker 01: But the CDC didn't reject his samples. [00:17:10] Speaker 01: The CDC was accepting his work. [00:17:14] Speaker 04: So, Your Honor, just to clarify, the CDC provided Dr. Lee with samples. [00:17:19] Speaker 04: That was the intention behind the repository that they created. [00:17:24] Speaker 04: And then Dr. Lee sent the results of his further testing to the CDC, and they gave him some insights on those, but they never pursued or encouraged or said, yes, we want you to do more work for us with these samples. [00:17:40] Speaker 04: This was Dr. Lee's research project. [00:17:43] Speaker 04: research that Dr. Lee wanted to pursue and it was his interest and the CDC was assisting him in his scientific development. [00:17:50] Speaker 04: But there are no factual allegations on the face of Dr. Lee's complaint to indicate that the CDC wanted to get involved in that research or that the CDC [00:18:02] Speaker 04: intended to contractually commit to promoting or enforcing that technology. [00:18:07] Speaker 04: And in that respect, Your Honor, it is telling that the acceptance that Ms. [00:18:13] Speaker 04: Lenhart mentioned occurs before the offer that she has indicated exists here. [00:18:21] Speaker 04: And that temporally just doesn't make sense for a valid contract. [00:18:26] Speaker 04: The acceptance that she identifies as Paragraph 15, the only thing that happened before that was the public webinar where the CDC presented to the scientific community at large and that she now concedes is not sufficient for an offer. [00:18:43] Speaker 04: Moreover, Your Honor, the only individuals that Dr. Lee interacted with at the CDC were scientists. [00:18:50] Speaker 04: And that makes sense and is consistent with the fact that this was sort of a scientific exchange of ideas, but it is not consistent and is not indicative of the intent to form a contract. [00:19:02] Speaker 04: And Dr. Lee has not alleged that any of the individuals that he actually interacted with, which was Dr. Schreifer and Dr. Mullins, would have actual authority to find the CDC and to enter into the type of endorsement contract [00:19:17] Speaker 04: that he claims has been breached here. [00:19:24] Speaker 04: Frankly, he fails to elect even that Dr. Bell had that authority. [00:19:28] Speaker 04: Certainly, we don't dispute in the context of this motion to dismiss that she had authority to sign the MTAs. [00:19:35] Speaker 04: But Dr. Lee agrees that the MTAs are a separate concern from the sort of broader endorsement contract that he claims was breached here. [00:19:43] Speaker 04: And there are no factual allegations that would plausibly suggest that Dr. Bell would have had that broader authority. [00:19:50] Speaker 04: But more fundamentally, even if she did have that authority, Dr. Bell never interacted with Dr. Lee. [00:19:56] Speaker 04: And he conceded that below and doesn't dispute that on appeal. [00:19:59] Speaker 04: And therefore, whatever authority she may have had, it could not [00:20:04] Speaker 04: support a contract that Dr. Lee alleged here. [00:20:13] Speaker 04: Fundamentally, Your Honor, the factual allegations that are in Dr. Lee's complaint, both his original complaint and the Court of Federal Claims gave him an opportunity to amend his complaint and to address some of the concerns that the court had identified with his original complaint. [00:20:32] Speaker 04: The factual allegations contained therein are simply not consistent with the intention of the CDC to enter into some kind of contract with Dr. Lee to endorse his technology. [00:20:45] Speaker 04: It's clear that the CDC interacted with Dr. Lee on sort of a scientific foundation. [00:20:51] Speaker 04: You know, conferences, discussions, the exchange of materials and ideas, these things are the foundation and the bedrock of scientific advancement. [00:20:59] Speaker 04: but they are not sufficient for nor are they indicative of contract formation. [00:21:04] Speaker 04: And so the scientists at the CDC that engaged with Dr. Lee on that scientific foundation could not and did not form a contractual relationship to endorse his technology. [00:21:17] Speaker 04: And so the Court of Federal Claims very carefully reviewed all of the allegations in Dr. Lee's complaint, including paragraph 16. [00:21:26] Speaker 04: In fact, it specifically mentions [00:21:28] Speaker 04: in the opinion, and so there is no question that the Court of Federal Claims was aware of those allegations specifically, correctly found that Dr. Lee was missing all of the necessary elements of contract information here. [00:21:43] Speaker 04: And if the court agrees with the, this court agrees with the Court of Federal Claims on any one of them, that is sufficient to a firm judgment here, and so the court should affirm. [00:21:56] Speaker 03: Okay, thank you. [00:21:57] Speaker 03: Let's hear rebuttal from the other side. [00:21:59] Speaker 05: Thank you very much. [00:22:01] Speaker 05: I think much of what counsel endeavored to bring to the court's attention really addresses matters reserved for trial or discovery. [00:22:12] Speaker 05: The issue here isn't whether Dr. Lee will win this case. [00:22:16] Speaker 05: It's whether he can present evidence. [00:22:18] Speaker 05: And that goes to the sufficiency of the allegations. [00:22:21] Speaker 05: I would invite you back to paragraph 16, [00:22:25] Speaker 05: But also paragraph 40, which describes the protocol and with regard to the protocol at appendix in the master appendix 971, council says Dr. Lee didn't sufficiently allege an offer to conduct the national study as I described earlier. [00:22:47] Speaker 05: Well, it specifically says at [00:22:49] Speaker 05: Appendix 977, the goal of the primary objective is to evaluate the accuracy of two-tier serological testing, DNA sequencing of nested PCR products, microscopy, and culture in diagnosing acute Lyme disease less than 30 days. [00:23:08] Speaker 05: Secondly, the goal of the project is to find practical and reliable tester tests [00:23:13] Speaker 05: for the diagnosis of early Lyme disease and related Borreliosis, which can be utilized in disease endemic areas for timely diagnosis of early Borrelia infections for appropriate and timely patient management. [00:23:28] Speaker 05: The investigators and other study participants are identified including the participatory role of the CDC. [00:23:38] Speaker 05: And under the section beginning at page 978, [00:23:42] Speaker 05: Page 979, the CDC's active participatory role is mentioned at least 10 times. [00:23:51] Speaker 05: So I do think we have sufficiently alleged and met the standards of Twombly and I would ask that the course. [00:24:00] Speaker 01: Was Dr. Lee at any point in this time, was he expecting to get paid by the CDC? [00:24:08] Speaker 05: Not for this research project, Your Honor. [00:24:11] Speaker 05: As may, and that hasn't been alleged in this complaint. [00:24:18] Speaker 05: The allegations were damages which did not serve as a basis for the decision underlying here. [00:24:28] Speaker 05: But the allegations of damages are contained toward the end of the complaint. [00:24:33] Speaker 01: And I would invite you to look at... Well, I'm looking at paragraph 16, which you cited a lot. [00:24:41] Speaker 01: And there's a lot of ifs in there in Woods. [00:24:46] Speaker 01: And it looks like it's, you know, the attempt is to show that there's at least a shadow of contractual terms that were arrived at. [00:24:57] Speaker 01: But I don't see anything in there about any type of consideration or what Dr. Lee was expecting from this. [00:25:05] Speaker 05: Okay. [00:25:05] Speaker 05: Again, Your Honor, I, you know, I think the goal and the offer was [00:25:11] Speaker 05: to establish the molecular test for the accurate diagnosis of the Lyme disease at an early stage. [00:25:19] Speaker 05: And that's, again, at the last sentence of paragraph 16. [00:25:23] Speaker 05: And then when you go to paragraph 40 and you see the description of the protocol aspect of it, I think that the purpose was for the CDC [00:25:37] Speaker 05: through this research project, which was its research project, not Dr. Lee's research project, to come up with the most reliable test for early detection of Lyme disease because the current and prevailing testing was not reliable and the results were not something that the doctors and the medical community could rely upon. [00:26:06] Speaker 03: Okay, I think one final thought because I think the time has expired. [00:26:12] Speaker 03: Unless Judge Rain has another question, follow up. [00:26:14] Speaker 03: No, that's fine. [00:26:17] Speaker 05: Would you like me to proceed? [00:26:20] Speaker 05: I just want to say how would Dr. Lee benefit in this and what was the consideration? [00:26:26] Speaker 05: Dr. Lee had developed his technology over 20 years. [00:26:29] Speaker 05: That's what's in the complaint. [00:26:31] Speaker 05: And this is a very valuable technology and test that had its degree of... Council, you answered my question and I appreciate it. [00:26:40] Speaker 05: Thank you. [00:26:40] Speaker 03: Thank you. [00:26:41] Speaker 05: Thank you. [00:26:41] Speaker 03: We thank both sides. [00:26:44] Speaker 03: Thank you.