Anchorage, a Municipal Corporation v. United States
119 Fed. Cl. 709
| Fed. Cl. | 2015Background
- Municipality of Anchorage (MOA) and MARAD entered written agreements (2003 and 2011) to expand the Port of Anchorage; MARAD provided funding and technical role while MOA retained certain program-review and acceptance duties.
- Defects in sheet piling were discovered in 2010, rendering large portions of the Project unusable; MARAD revised oversight in a 2011 agreement (which expired May 31, 2012).
- MARAD contracted with ICRC (2003, renewed 2008) for program management and design-build services; ICRC subcontracted to PND, QAP, and MKB.
- MARAD settled ICRC’s Contract Disputes Act claims in 2012 for $11.3 million; MOA alleges MARAD settled using MOA funds, failed to enforce ICRC’s obligations, and otherwise breached duties.
- MOA sued in the Court of Federal Claims alleging (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) breach of contract as a third-party beneficiary of the MARAD–ICRC contracts.
- The Government moved to dismiss under RCFC 12(b)(1) and 12(b)(6); the court denied dismissal as to Counts I and II and granted dismissal as to Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Court jurisdiction under Tucker Act: are the 2003 and 2011 agreements "money-mandating" or cooperative agreements? | MOA: agreements are express contracts between the United States and MOA and thus permit money damages. | Gov’t: agreements are cooperative (FGCAA-style) and not presumed to allow monetary relief; no express monetary remedy exists. | Court: agreements are not cooperative agreements; they can be fairly read to contemplate money damages → Tucker Act jurisdiction exists. |
| Breach of contract (Count I): did MARAD owe duties to design/construct/manage the Project? | MOA: MARAD assumed design/management duties; its failures caused the defective Project. | Gov’t: MOA retained primary program/approval duties; MARAD’s role was largely financial/technical assistance, not design/management. | Court: factual dispute over contractual duties survives 12(b)(6); Count I survives to discovery. |
| Breach of implied covenant/good faith (Count II): did MARAD’s conduct (payments, settlement with ICRC, nonparticipation in dispute process) breach implied duties? | MOA: MARAD recklessly disbursed funds, settled with ICRC without MOA, continued acting like a contracting party after expiration (implied-in-fact contract). | Gov’t: alleged breaches occurred after 2011 agreement expired; duties ended with contract; some duties (review/acceptance) remained MOA’s and preclude MARAD liability. | Court: MOA plausibly pleaded breaches and facts (including post-expiration conduct) that could establish an implied-in-fact contract; Count II survives. |
| Third-party beneficiary claim (Count III): can MOA sue MARAD as third-party beneficiary of MARAD–ICRC contracts? | MOA: it was an intended third-party beneficiary and MARAD’s failures against ICRC harmed MOA. | Gov’t: MOA cannot step into ICRC’s shoes because MARAD did not breach the MARAD–ICRC contracts in a way that would permit ICRC to sue. | Court: MOA failed to plead that MARAD actually breached the MARAD–ICRC contracts; mere failure to enforce rights does not create a third-party beneficiary claim → Count III dismissed. |
Key Cases Cited
- Testan v. United States, 424 U.S. 392 (1976) (sovereign immunity and need for waiver to sue United States)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (plaintiff bears burden to establish jurisdiction)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings)
- Hamlet v. United States, 63 F.3d 1097 (Fed. Cir. 1995) (source of law must be fairly interpreted as contemplating money damages)
- Loveladies Harbor, Inc. v. United States, 27 F.3d 1545 (Fed. Cir. 1994) (contract or statute can be money-mandating)
- Holmes v. United States, 657 F.3d 1303 (Fed. Cir. 2011) (express contract presumption that monetary relief is available under Tucker Act)
- Sullivan v. United States, 625 F.3d 1378 (Fed. Cir. 2010) (third-party beneficiary must stand in shoes of contracting party)
- Seven Resorts, Inc. v. United States, 112 Fed. Cl. 745 (2013) (post-expiration performance can create an implied-in-fact contract)