[00:00:00] Speaker 01: We will hear argument next in case number 241264, JSTAR Enterprises versus United States. [00:00:09] Speaker 02: Good morning, Your Honors. [00:00:11] Speaker 02: May it please the court, Jason Anders on behalf of JSTAR Enterprises. [00:00:16] Speaker 02: We're here today on an appeal of the grant of a motion to dismiss JSTAR's claims under Rule 12B1 and 12B6. [00:00:26] Speaker 02: This was dismissed at the early stages of the litigation. [00:00:29] Speaker 02: There was no discovery that was allowed. [00:00:31] Speaker 02: And JSTAR contends that that decision was in error because the Court of Federal Claims didn't take into account activities that took place after the liquidated damages were assessed in October of 2015. [00:00:45] Speaker 02: Judge Tapp actually said in his opinion that there are no events that would have given rise to a potential claim after October 1st of 2015. [00:00:53] Speaker 02: when JSTAR reluctantly accepted the assessment of liquidated damages. [00:00:57] Speaker 02: And there's no dispute as to that day. [00:01:00] Speaker 02: JSTAR doesn't dispute that they did that. [00:01:04] Speaker 02: What brings it within the six-year statute of limitations is what took place after October of 2015, because JSTAR feels that it was improperly assessed to liquidate damages. [00:01:13] Speaker 02: The only excuse that was ever given by the government was that it was late, that the project was late. [00:01:18] Speaker 02: In this project, both sides agree, it was riddled with delays. [00:01:21] Speaker 02: It was a 2014 contract for the installation of a drainage pipe at the Fort Hood base. [00:01:27] Speaker 02: Throughout the project, JSTAR contends that the government refused to approve personnel that was more than qualified to serve in certain positions, which delayed the project. [00:01:38] Speaker 05: So what did you allege in your complaint happened after October 1st, 2015 that would have made a difference to when your claim accrued? [00:01:46] Speaker 02: Well, Judge, I looked at that and there's not a reference in the complaint to the FOIA request that was issued. [00:01:51] Speaker 02: in November of 2016. [00:01:55] Speaker 02: And that FOIA complaint is, when JSTAR was starting to try to investigate its claim to determine if it has a cause of action for the improper assessment of liquidated damages, which took place in October, the government delayed that response and asked even that it be. [00:02:12] Speaker 05: So putting aside, just for the moment, maybe we'll get to it whether a FOIA request could stay the, we're told, the running of the statute [00:02:20] Speaker 05: I think you've acknowledged the complaint, which is what they moved to dismiss, the complaint. [00:02:26] Speaker 05: It doesn't say anything about FOIA. [00:02:27] Speaker 05: And I don't think it says anything about anything that happened after October 1, 2015, does it? [00:02:32] Speaker 02: It doesn't, Your Honor. [00:02:32] Speaker 02: The complaint doesn't. [00:02:33] Speaker 02: But we weren't given the opportunity to amend. [00:02:35] Speaker 05: And I also believe that- But you weren't given the opportunity to amend? [00:02:38] Speaker 05: Did you ask to? [00:02:39] Speaker 02: I don't recall if we did, Your Honor. [00:02:40] Speaker 02: I can't say exactly that we did. [00:02:42] Speaker 02: But I don't believe it would matter. [00:02:43] Speaker 02: But I've considered that question because there's a statement in Judge Tapp's opinion where he says there are no events. [00:02:48] Speaker 02: Even when all parties agreed that the FOIA request was submitted in November, there was a delay requested by the government through December, which puts us into the six-year statute of limitations. [00:02:58] Speaker 02: And then there was basically an inadequate production in February of 2016, which is no question within the six years. [00:03:06] Speaker 02: There's no disputas to that. [00:03:08] Speaker 02: Judge Tapp said, even considering that there is no event past October 1, 2015, when JSTAR reluctantly did so, but accepted [00:03:17] Speaker 02: the assessment of liquidated damages and accepted final payment on the contract, that there's no events past that date that could even potentially... What claim arose within the six-year statute of limitations? [00:03:29] Speaker 03: Setting aside tolling again. [00:03:31] Speaker 02: I understand. [00:03:32] Speaker 03: I mean, if we disagree with you on tolling, then there's one accrual date for liquidated damages, which is October 2015. [00:03:42] Speaker 03: Are you arguing that somehow you discovered a new claim during the foyer? [00:03:46] Speaker 02: I believe that after October 2015, the continued delays by the government and producing the records, failing to produce the records... Oh, wait, no. [00:03:55] Speaker 04: Continued? [00:03:56] Speaker 04: You mean on the documents? [00:03:59] Speaker 02: It's the duty of the good faith and fair dealing, Your Honor. [00:04:02] Speaker 02: The other two claims that JSTAR made in its complaint were the government's breach of its duty of good faith and fair dealing and its implied duty to cooperate and to not to hinder. [00:04:11] Speaker 03: You're saying that the delay in doing FOIA somehow constitutes a breach of good faith and fair dealing with regards to the contract? [00:04:19] Speaker 02: We don't know that because we weren't allowed to do discovery in the case, Your Honor. [00:04:23] Speaker 03: Well, I think definitionally, FOIA requests don't deal with contract administration. [00:04:30] Speaker 03: I understand that, Your Honor, but we feel like that... If that's the case, then that's not a new claim. [00:04:34] Speaker 03: Do you have anything else? [00:04:36] Speaker 02: I don't think so, Judge, other than that, that would fall with that FOIA request and [00:04:40] Speaker 02: We don't know what took place between the FOIA request being submitted in November and the actual, number one, the delay and then the production. [00:04:48] Speaker 03: What does it matter? [00:04:49] Speaker 03: You're challenging the assessment of liquidated damages. [00:04:52] Speaker 03: You know when the date was and what they were. [00:04:55] Speaker 02: Right. [00:04:56] Speaker 02: But there are other claims beyond the assessment of liquidated damages. [00:04:59] Speaker 02: It's also with the General Contract Administration. [00:05:01] Speaker 03: I just asked you. [00:05:02] Speaker 02: Well, those are events that took place prior to [00:05:06] Speaker 02: uh... the issuance of the four-year request in the assessment of liquidated damages there were other issues with the administration of the contract like the different delays. [00:05:13] Speaker 03: Sounds like you're out of time on those, too. [00:05:16] Speaker 02: Could be potentially, Your Honor, but the four-year request could have provided us with information that could have supported the claim within that six-year window and certainly discovery. [00:05:25] Speaker 02: I mean, this was dismissed on the 12B1 and the 12B6 without any opportunity for JSTAR to conduct discovery. [00:05:31] Speaker 03: JSTAR... You don't get discovery when you file the complaint after the statute of limitations. [00:05:36] Speaker 02: Well, that's really the dispute, Your Honor. [00:05:39] Speaker 02: We contend that we did file within the statute of limitations because of these events that continue to occur after the assessment of liquidated damages. [00:05:46] Speaker 02: And it was all one continuing activity by the government to delay the production of records, to not approve people, just the general contract administration. [00:05:55] Speaker 02: And we don't know why the FOIA request was delayed or why certain documents weren't produced. [00:06:00] Speaker 02: And we feel that that puts us within the six-year limitation window, and at least we should have been allowed to conduct discovery. [00:06:07] Speaker 02: As a small business at the time, they accepted this money because they needed it. [00:06:12] Speaker 02: Even though with the assessment of liquidated damages, it's still almost a million-dollar contract for this small, I believe at the time it was an ADA-qualified small business company. [00:06:21] Speaker 02: So they accepted this, then they started to investigate and that gets us within the six years, but now the district court went back to the assessment of liquidated damages and says that's it. [00:06:31] Speaker 02: No discovery, we never got an adequate FOIA response, and we submit that we were within that time and we should have at least been given the opportunity to conduct discovery to support the claim. [00:06:44] Speaker 02: But imagine we might be back on a motion for summary judgment after some discovery is conducted. [00:06:48] Speaker 02: But as Your Honors know, the standard is it has to be beyond doubt that there's no possible claim that could be submitted. [00:06:55] Speaker 02: And at this point, we feel that we should have been given the opportunity to at least support those claims and then have it addressed likely on a summary judgment motion, not a 12E1 or a 12E6. [00:07:04] Speaker 02: If Your Honors don't have any more questions, I'll reserve my time. [00:07:10] Speaker 02: Thank you, Your Honors. [00:07:21] Speaker 00: May it please the court. [00:07:22] Speaker 00: Good morning, Your Honors. [00:07:25] Speaker 00: The Contract Disputes Act requires that government contractors present claims to contracting officers within six years that the claim would accrue. [00:07:34] Speaker 00: As we see in the complaint and as we've heard today, all the events that could have possibly led to a claim occurred on or before October 1st, 2015. [00:07:48] Speaker 00: When JSTAR filed its complaint, when JSTAR presented a claim to the contracting officer in November 2021, it was more than six years after the end of this contract. [00:08:00] Speaker 00: They've identified no events during that period that could possibly accrue a new claim. [00:08:07] Speaker 00: If Your Honors have no further questions. [00:08:09] Speaker 01: So that deals with the six-year rule for filing a claim with the contracting officer, right? [00:08:18] Speaker 01: Yes, Your Honor. [00:08:20] Speaker 01: There was a separate point in the Court of Federal Claims opinion about [00:08:26] Speaker 01: Was it the one year rule for coming to the Court of Federal Claims? [00:08:31] Speaker 00: Correct, Your Honor. [00:08:32] Speaker 00: There's some court of federal claims precedent that the government's assessment of liquidated damages is a final decision of a contracting officer that can be brought directly to the court of federal claims. [00:08:44] Speaker 00: I don't believe this court has reviewed this question, but we also argued in the alternative that was also untimely as a challenge to that assessment of liquidated damages. [00:08:55] Speaker 00: Would have had to have been filed by October 1st, 2016. [00:08:59] Speaker 00: We are well outside of that limit as well. [00:09:01] Speaker 00: So the trial court dismissed on both grounds, and we believe that this court can affirm on both or either one. [00:09:12] Speaker 05: Does the government have a view on whether a FOIA request within the six-year window could, in some circumstances, toll the running of the statute? [00:09:21] Speaker 00: Your Honor, I don't want to foreclose any future possibility that a FOIA request could reveal an event that led to the claim accrual, but surely these circumstances do not demonstrate that. [00:09:32] Speaker 03: I'm a little surprised by that answer, frankly. [00:09:34] Speaker 03: I would think that the Justice Department said the FOIA itself doesn't toll. [00:09:38] Speaker 03: Perhaps if a new claim is uncovered, that is a new claim accrual, but it has nothing to do with tolling itself. [00:09:45] Speaker 00: Yes, Your Honor. [00:09:46] Speaker 00: That would be a more accurate assessment of my position. [00:09:51] Speaker 00: Thank you, Your Honor. [00:09:54] Speaker 00: Unless there's anything further, we ask the court affirm the court federal claims. [00:09:59] Speaker 01: Thank you. [00:10:05] Speaker 02: Your Honor, I just wanted to address that question about the one year on liquidated damages. [00:10:09] Speaker 02: We don't dispute that, that that assessment was made and accepted on October 1st of 2015, and there was not an appeal to the Court of Federal Claims. [00:10:17] Speaker 02: If that's considered a contractor's office, the final decision of a contracting officer. [00:10:22] Speaker 01: You want to get to the, what, the January 2022 denial? [00:10:26] Speaker 01: That's correct, Your Honor. [00:10:28] Speaker 01: The problem with that was that the claim didn't get to the contracting officer within the six-year period. [00:10:35] Speaker 02: That's correct. [00:10:35] Speaker 02: And that's where the four-year request would come in to see. [00:10:38] Speaker 02: It's not necessarily the assessment of liquidated damages, but JSTOR's contention as to why they were assessed and the reasoning for that. [00:10:45] Speaker 02: And we feel like the government had intentionally delayed that response, which would support its claims for a breach of duty of good, fake, and fair dealing, at least into February when they produced essentially a minimal response, which would support our claim within the six-year period. [00:11:00] Speaker 02: Thank you, Your Honors. [00:11:01] Speaker 01: Thank you. [00:11:02] Speaker 01: Thanks to both counsel. [00:11:03] Speaker 01: Cases submitted.