[00:00:00] Speaker 03: Our next case is Enraged Secretary of the Army, 23-2067. [00:00:05] Speaker 03: Councillor Cote, you have 15 minutes. [00:00:12] Speaker 03: Plus whatever rebuttal. [00:00:15] Speaker 03: Don't rebut yourself. [00:00:19] Speaker 02: Good morning, Your Honor. [00:00:20] Speaker 02: So may it please the Court. [00:00:22] Speaker 02: The decision of the Armed Services Board of Contract Appeals [00:00:26] Speaker 02: awarding attorney's fees pursuant to the Equal Access to Justice Act, or EGET, should be vacated. [00:00:32] Speaker 02: Determining whether the government's position was substantially justified, the ASBCA, or the board, clearly considered the government's litigation position only on the issue on which the contractor prevailed. [00:00:47] Speaker 02: Instead of considering the litigation position holistically, which runs afoul of the Supreme Court precedent in Commissioner INS v. Gene, [00:00:56] Speaker 02: this court's precedent and the precedent of nearly every circuit to consider the issue. [00:01:01] Speaker 00: And the every circuit, I mean, I think you recognize the DC circuit is somehow to the contrary. [00:01:09] Speaker 00: How many are on the other side, like three? [00:01:14] Speaker 02: Your Honor, the DC circuit has rejected the holistic approach, although it did not grapple with Jean in the decision. [00:01:24] Speaker 02: Jacobs versus Schiffer that we've cited in the brief. [00:01:29] Speaker 02: We've cited a number of circuits that have decisions agreeing with or supporting the holistic approach, including the fifth [00:01:37] Speaker 01: Do you have a specific circuit that you think we should contemplate applying in terms of the approach? [00:01:44] Speaker 01: Because I do think the different circuits were dealing with it differently. [00:01:48] Speaker 02: Yes, Your Honor. [00:01:49] Speaker 02: The Fifth Circuit's decision in WMVC, I think, considers the issue in the most depth and really explicitly rejects the DC Circuit's approach and explains why it believes [00:02:05] Speaker 02: The DC Circuit's approach is inconsistent with Commissioner Ayanes versus Jeans. [00:02:10] Speaker 02: But you need not look outside of this court's own precedent because this circuit has already endorsed a holistic approach. [00:02:20] Speaker 02: Back in 1991 in She versus the United States, the court instructed trial courts to look at the entirety of the government's conduct in order to assess the government's overall litigation position. [00:02:33] Speaker 02: And more recently, [00:02:35] Speaker 02: in DGR Associates versus United States. [00:02:40] Speaker 02: This court also considered the government's position on two different arguments. [00:02:48] Speaker 02: There was a jurisdictional argument and there was a merits argument. [00:02:51] Speaker 02: And in that case, the court said, although it's questionable whether the government's jurisdictional position was substantially justified, [00:03:03] Speaker 02: when viewed in the overall context, concluded that the government's position was justified to a degree that could satisfy a reasonable person, and thus reversed the trial court, which had concluded that the government's position was not substantially justified. [00:03:18] Speaker 00: You mentioned DGR. [00:03:21] Speaker 00: What was the first case from our court that you mentioned? [00:03:23] Speaker 02: Shu versus United States, CHIU. [00:03:26] Speaker 02: I've also cited in the brief. [00:03:30] Speaker 02: We also cited this court's unpublished decision from 2022 in Monroe versus United States, which also cites to Hsu, as well as a couple of other cases, international custom products, and Berhea versus Principe. [00:03:42] Speaker 00: So can you help me understand how this is supposed to work on the assumption that there's some holistic [00:03:52] Speaker 00: or a whole litigation or something like that. [00:03:55] Speaker 00: I guess I really have a couple of different questions. [00:03:58] Speaker 00: One is, let's assume that's right and there's going to be a separate thing. [00:04:02] Speaker 00: Is this really one of those? [00:04:07] Speaker 00: How do the courts, or should, in your view, the courts decide? [00:04:11] Speaker 00: So there are two claims in a single case, let's say. [00:04:15] Speaker 00: And let's actually say that they, from the hypothetical, that they are asking for distinguishable enough relief. [00:04:24] Speaker 00: And the plaintiff wins on one and loses on the other. [00:04:30] Speaker 00: What's the next step in the holistic analysis? [00:04:33] Speaker 00: Comparing the amounts? [00:04:37] Speaker 02: I mean, the courts and the boards are instructed to consider the government's entire litigation position and also its pre-litigation position, also its position on remand. [00:04:52] Speaker 02: I mean, in a number of the different cases, there's a lot of different positions of the United States. [00:04:57] Speaker 02: But I believe that [00:05:01] Speaker 02: exactly how you would weigh it. [00:05:03] Speaker 00: I mean, I understand that if there's essentially a single claim and the government says, you know, we have four defenses and, you know, and the government, you know, succeeds on one or something and others are not good, then, you know, maybe that's one thing. [00:05:20] Speaker 00: This is kind of stages of the litigation toward kind of a single outcome. [00:05:24] Speaker 00: But I guess I'm trying to understand the [00:05:30] Speaker 00: the situation of relatively distinct claims, let's assume actually different relief, how that works. [00:05:41] Speaker 00: You know, the plaintiff wins on one of them, gets $180,000 that just by assumption doesn't overlap with the $450,000 on the claim it lost. [00:05:52] Speaker 02: Your Honor, I think that would be a fact-specific [00:05:57] Speaker 02: question for the fact finder in the first instance to balance the claim on which the government won. [00:06:03] Speaker 00: But language like that is not helpful in trying to figure out whether if we agree with you that some sort of as a whole analysis is required that we're buying something that's doable or sensible. [00:06:22] Speaker 02: Well, Your Honor, I think if this court were to agree that a holistic approach is either the correct approach because we've already said so in a number of other cases in the circuit or because it's mandated by the Supreme Court precedent or because it's persuaded that that's just the correct approach, that is all that this court needs to decide today because the board did not make any findings as to the [00:06:50] Speaker 02: government's litigation position as to the other claims on which it prevailed. [00:06:56] Speaker 01: I also share Judge Toronto's concern that we're not really giving much guidance as to what to do to actually apply this holistic approach. [00:07:07] Speaker 01: I don't want to speak for him, but I think that he's just trying to maybe get at kind of the contours of how it would actually be carried out in practice, let's say it that way. [00:07:17] Speaker 02: Yeah, I mean, I understand the court's concern, but it really is, I mean, it's a balancing. [00:07:27] Speaker 02: I think there could be, it could be taken into account the actual [00:07:36] Speaker 02: legal positions that were taken. [00:07:38] Speaker 02: It could be the amount of recovery. [00:07:41] Speaker 02: I think that there could be a number of factors that are taken into account. [00:07:47] Speaker 03: Isn't the problem that we're trying to define what the holistic approach is, as opposed to identifying the instances in which it's not? [00:07:58] Speaker 03: And here, for example, the board acknowledges, and it says at J-A-4, [00:08:05] Speaker 03: It says, well, the entirety of the government's litigation position must be considered and determined. [00:08:11] Speaker 03: So it acknowledges, right, the entirety of the government's litigation position. [00:08:16] Speaker 03: It says it's essentially justified rather than its posture of individual issues. [00:08:22] Speaker 03: So far, so good. [00:08:25] Speaker 03: Then it goes on and says, and here's the problem. [00:08:27] Speaker 03: That entirety relates to the government's position on a particular claim to which the contractor prevailed and not to the litigation as a whole. [00:08:37] Speaker 03: That seems to me to be a clear misunderstanding of looking at the entirety of a government's position. [00:08:46] Speaker 02: Oh, that's correct, Chair. [00:08:46] Speaker 02: That is the exact language with which we have a problem. [00:08:49] Speaker 02: The second part of that phrase where the board said the entirety of the government's [00:08:57] Speaker 02: is only about the particular claim on which the contract was made. [00:09:00] Speaker 03: Then we would have to send this back and have the board look at this from just the entirety of the government's position. [00:09:08] Speaker 02: That's correct, Your Honor. [00:09:09] Speaker 02: We're not asking this court to make those findings in the first instance because the board failed to make the findings as to the government's position as a whole or the government's position on the claims on which it won and how that balanced against the litigation position on the claim on which it did not win. [00:09:25] Speaker 02: So we would ask the court to vacate the ASPCA's decision on attorney's fees and remand back to the board to make those findings and do that balancing to consider whether the conduct as a whole was substantially justified. [00:09:41] Speaker 00: Um, are there separate claims in a contract dispute sex sense here based on, on the one hand, the covert and the other, the backflow or something, the non covert claims. [00:09:56] Speaker 02: Your honor, there was only one claim letter in this case. [00:10:01] Speaker 02: There were two distinct issues, but there was only one claim letter. [00:10:07] Speaker 00: I thought either the contract officer or someone described these as separate claims. [00:10:13] Speaker 00: The government, I think, in CDA cases is fairly finicky about keeping track of separate claims, largely for exhaustion purposes. [00:10:23] Speaker 02: Yes, Your Honor. [00:10:25] Speaker 02: The board does attempt to make this distinction between individual issues versus particular claims. [00:10:31] Speaker 02: We've argued in the brief and today that this distinction is meaningless. [00:10:36] Speaker 02: It doesn't [00:10:36] Speaker 02: It doesn't make sense, and it's not consistent with the court's decision in gene. [00:10:41] Speaker 00: Could CKY have brought two separate actions in front of first contracting officer, second in front of the board? [00:10:54] Speaker 02: Your Honor. [00:10:55] Speaker 02: I don't know that they could have because, again, there was one claim letter and there was one relevant contract modification, which the government had argued resolved both claims, both issues that the contractor raised, both the high river water level and the undisclosed culverts issue. [00:11:16] Speaker 02: And so the government's defense was that. [00:11:23] Speaker 02: the one contract modification addressed both issues, and the ASVCA disagreed. [00:11:28] Speaker 02: So although there were two different bases for the claim that [00:11:39] Speaker 02: the, that CKY submitted. [00:11:40] Speaker 00: I thought there were actually even two different amounts. [00:11:43] Speaker 00: One was, none of this is confidential, right? [00:11:46] Speaker 02: There were, correct. [00:11:48] Speaker 00: There's $180,000, which is like, or the change and change on the covert claims. [00:11:53] Speaker 00: And that's what they won. [00:11:54] Speaker 00: And there's, you know, you know, half a million or something on [00:11:58] Speaker 00: on the ones that they lost. [00:12:00] Speaker 02: Well, Your Honor, the CKY never distinguished how much of its claim was for specifically the high river water level versus the undisclosed culverts issue. [00:12:09] Speaker 02: Their original claim before the ASPCA was $1.1 million, or maybe that was to the agency. [00:12:15] Speaker 02: And then when they came to the board, they were asking for $700,000, again, not distinguishing which amount was for which claim. [00:12:21] Speaker 02: The amount of $185,000 [00:12:24] Speaker 02: which CKY ultimately recovered was due to a settlement on the quantum. [00:12:30] Speaker 02: So it isn't necessarily that the 185 was for that issue and the remainder was for the claim on which the government won. [00:12:37] Speaker 00: I think it's a little bit more nuanced. [00:12:44] Speaker 00: This is, I think, the contracting officer's final decision. [00:12:48] Speaker 00: It begins at page 65. [00:12:50] Speaker 00: If you turn to page 75, there's an itemization, different dollar amounts for high river impacts. [00:12:58] Speaker 00: And I'm looking at BNC, little BNC on that page under 10. [00:13:02] Speaker 00: And the culverts, different amounts, separate dollar amounts. [00:13:09] Speaker 00: And I think either there or elsewhere, the word [00:13:13] Speaker 00: claim is used in the plural several times. [00:13:16] Speaker 02: I would point you back to the board's decision in this case, where at appendix pages eight and nine, the board finds that the appellant's original claim did not identify how much of its total claimed amount was attributable to the High River impacts and how much to the undocumented culvert. [00:13:41] Speaker 00: So where does this material on page 75 come from? [00:13:47] Speaker 00: Somebody at some point identified amounts. [00:13:53] Speaker 02: Yeah. [00:13:53] Speaker 02: I mean, you're right. [00:13:54] Speaker 02: That was from the contracting officer's final decision. [00:13:57] Speaker 02: I believe the original claim letter may not have distinguished. [00:14:01] Speaker 02: And at some point along the way, there may have been attributing some amount to some and some amount to the other. [00:14:09] Speaker 02: But again, the quantum that CKY ultimately recovered was due to a settlement of the quantum after the ASVCA concluded that they had prevailed on one claim and lost on the other. [00:14:22] Speaker 02: But on remand, if this court were to agree that the Holistica purchased the correct one and that the board did not apply the correct standard, the board would have to consider [00:14:36] Speaker 00: the entirety of the conduct, including... How does that... Commissioner against Jean has a bit of language in a fairly different context that gives you and gave a number of circuits a good basis to begin, but it doesn't actually cover this kind of situation. [00:14:57] Speaker 00: And there's a lot in certainly Supreme Court decisions, I'm sure other decisions too, about [00:15:04] Speaker 00: not wanting to make the attorney's fees portion of a litigation into a giant piece of litigation itself. [00:15:13] Speaker 00: Isn't that a worry with saying, now go and figure out under standards that are essentially [00:15:22] Speaker 00: indefinite. [00:15:24] Speaker 00: Consider a lot of things. [00:15:26] Speaker 00: We have no idea what to tell you about how to consider them. [00:15:29] Speaker 00: It might not be a numerical comparison of what was won and was lost. [00:15:33] Speaker 00: Maybe it would. [00:15:34] Speaker 00: We don't know. [00:15:35] Speaker 00: Consider that. [00:15:36] Speaker 00: At this point, the attorney's fees litigation is getting bigger and bigger. [00:15:41] Speaker 00: Of course, it might be entirely one-sided, maybe. [00:15:44] Speaker 00: I mean, the other side might not show up. [00:15:45] Speaker 00: I don't know. [00:15:46] Speaker 00: But on the assumption that they show up, this is more and more and more costs. [00:15:52] Speaker 02: Um, your honor, I, two quick responses to I see my time is up, but I, I do, um, although the facts from commissioner versus Jean are not identical to the situation we have here, the court does [00:16:05] Speaker 00: I want to hear about how it provided a principle. [00:16:10] Speaker 00: It stated a principle in a radically different context. [00:16:14] Speaker 00: I'm willing to consider that that means something. [00:16:18] Speaker 00: But it didn't have to address this problem of, are we creating a standardless standard for multi-claim litigation about how to figure out what the whole is [00:16:33] Speaker 00: versus the unjustified parts. [00:16:38] Speaker 02: Again, I don't know that simply because we're looking at the entirety of the conduct that there are no standards. [00:16:47] Speaker 02: Different courts in many circuits have considered [00:16:51] Speaker 02: both pre-litigation versus litigation positions or multiple different arguments during marriage litigation or positions on remand. [00:16:59] Speaker 02: There are standards that have come out of the cases that have considered and decided these issues, but this holistic approach, even if it might not be the easiest to apply, is [00:17:13] Speaker 02: is what's consistent both with the Supreme Court precedent, as well as the purpose of IJA, which is to only provide attorneys fees award for unreasonable government positions. [00:17:23] Speaker 01: Is it your position that the party needs to prevail on the claim that has the bigger monetary value in order to prevail as a whole? [00:17:33] Speaker 02: Um, we would not argue that there would, there would be any sort of bright line rule or that, that, that, that a litigation position on only one claim could sway the consideration of substantial justification, whether or not it's the larger claim. [00:17:47] Speaker 01: It's not your position that the plaintiff, if there are two claims, has to prevail on both to prevail as a whole, right? [00:17:53] Speaker 02: No, Your Honor. [00:17:54] Speaker 01: No. [00:17:54] Speaker 01: That's not your position, right? [00:17:55] Speaker 02: That's not our position. [00:17:57] Speaker 02: The, the, the, the contractor could be a prevailing party. [00:18:02] Speaker 02: on only one claim out of many or a couple of claims out of many, the substantial justification question should consider the conduct as a whole and then only if the government's conduct [00:18:16] Speaker 02: as a whole has no substantial justification, can there be an attorney's fees awarded for the claims on which they're given? [00:18:21] Speaker 03: So is it your view that there really is at this point no particular standard as to what this, how to consider the litigation as a whole or how to take this holistic approach? [00:18:38] Speaker 02: Your Honor, I would disagree that there are no standards because there are a number of cases that we have cited in the brief that have considered the issue, a number of trial court decisions, I mean, in addition to a number of trial court decisions and board decisions that have looked at. [00:18:55] Speaker 03: And these are the cases you cited in your brief? [00:18:58] Speaker 02: A lot of the cases that we cited in our brief were appellate cases reviewing attorney's fees awards, but that... I guess I'm asking this because if we were to remand, what is it we would say? [00:19:12] Speaker 02: We would ask this court to direct the ASVCA in this case to consider [00:19:22] Speaker 02: the entirety of the government's conduct, including its position on all of the issues, which is what the board clearly did not do. [00:19:28] Speaker 03: That's instructing them what to do. [00:19:30] Speaker 02: Yeah. [00:19:31] Speaker 03: But should we not also have something about how to do it? [00:19:37] Speaker 03: What are the steps? [00:19:38] Speaker 03: I'm confused there. [00:19:40] Speaker 03: And I think I may have heard the same from my colleagues. [00:19:44] Speaker 00: Well, Your Honor. [00:19:45] Speaker 00: None of that's been briefed. [00:19:46] Speaker 00: I mean, you may cite cases that have in them the standards, but what those standards are is not in any way part of your brief. [00:19:53] Speaker 00: None of the other side's not. [00:19:55] Speaker 02: No, Your Honor. [00:19:55] Speaker 02: Although the briefs to the board are in the appendix in this case where we argued why our position was substantially justified, not only on the undisclosed culverts issue, but on the other issues or as a whole in its entirety. [00:20:09] Speaker 02: But I think that there are some [00:20:12] Speaker 02: There are some considerations that courts have looked at, including whether the case is an issue of first impression, what the basis of fact in law are, the amount of recovery, the number of claims on which the contractor prevailed. [00:20:24] Speaker 02: I think that there are considerations that have been used in different cases. [00:20:31] Speaker 03: Your five minutes shall be your time. [00:20:35] Speaker 02: Do you want any rebuttal? [00:20:36] Speaker 03: Thank you very much for your time. [00:20:38] Speaker 02: Thank you, Your Honors.