Capitalkeys, LLC v. Ciber, Inc.
875 F. Supp. 2d 59
D.D.C.2012Background
- CK, LLC sues CIBER, Inc. for breach of contract and unjust enrichment related to an engagement to obtain a DC government contract.
- The contract paid CK a fixed fee of $5,000 per month for six months with a six‑month renewal; paragraph five provided contingent additional fees tied to closing a deal.
- The contingency fee clause purportedly owed CK 3% of the DC contract value if the deal closed; CK claimed the contract with DC is worth $17,000,000.
- CIBER terminated CK’s engagement on November 30, 2010 after CK had provided intelligence and services to aid CIBER’s bid.
- CK sought 3% of the DC contract value ($510,000) plus remaining monthly payments, or, alternatively, restitution for unjust enrichment.
- The court granted partial summary judgment for CIBER, invalidating the contingency fee under public policy and dismissing CK’s unjust enrichment claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is paragraph five a prohibited contingent-fee provision? | CK argued it only covered additional services. | CIBER contends it is a contingent fee payable only if a sale closes. | Yes; provision void as public policy. |
| Can CK recover under unjust enrichment where an express contract exists? | CK claims enrichment for services billed at standard rates. | Existence of express contract precludes unjust enrichment recovery. | No; court grants summary judgment for CIBER on unjust enrichment. |
Key Cases Cited
- Tool Co. v. Norris, 69 U.S. (2 Wall.) 45 (U.S. 1864) (contingent-fee contracts with government violate public policy)
- Le John Mfg. Co. v. Webb, 222 F.2d 48 (D.C. Cir. 1955) (contingent-fee prohibition with government contracts; bona fide agency test)
- Markon v. Unicorp Am. Corp., 645 F. Supp. 62 (D.D.C. 1986) (contingent-fee invalid when contract involves single transaction)
- Bradley v. Am. Radiator & Std. Sanitary Corp., 159 F.2d 39 (2d Cir. 1947) (bona fide agency exception—limited applicability to general business sales)
- Noonan v. Gilbert, 68 F.2d 775 (D.C. Cir. 1934) (courts skeptical of contingent-fee arrangements; corrupting tendency)
- Citizens United v. FEC, 130 S. Ct. 876 (S. Ct. 2010) (limits on corporate campaign expenditures; not direct overrule of Norris for government-contract context)