Global Freight Systems Co. W.L.L. v. United States
130 Fed. Cl. 780
| Fed. Cl. | 2017Background
- Global Freight, a subcontractor at Camp Lemonnier in Djibouti, provided vehicle leasing and support services under PAE then KBR prime contracts (2011–2014).
- The U.S.–Djibouti Base Access Agreement (BAA) governed status of U.S. personnel, contractors, tax exemptions, import/export of removable property, movement of vehicles, and a diplomatic disputes clause.
- While U.S.–Djibouti negotiations for a new BAA were ongoing in early 2014, the Navy (via KBR communications) directed Global Freight to remove vehicles from inside Camp Lemonnier to locations in Djiboutian jurisdiction.
- Djiboutian authorities then seized 29 Global Freight vehicles; Global Freight later paid Djibouti ~25 million Djiboutian francs to recover them and sued the United States in the Court of Federal Claims alleging a Fifth Amendment taking and, alternatively, breach of the KBR prime contract as a third-party beneficiary.
- Government moved to dismiss for failure to state a takings claim, lack of jurisdiction over the contract claim under 28 U.S.C. § 1502 (treaty-related), and insufficient third-party beneficiary pleading; Court denied the motion and allowed discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Navy’s direction that vehicles be moved out of base and resulting Djiboutian seizures state a cognizable Fifth Amendment taking | Navy’s instruction (knowing Djiboutian hostility) was a U.S. action that made seizure possible and served U.S. interests (thus a taking) | Seizure was Djiboutian customs enforcement, not attributable to U.S.; diplomatic persuasion is too nebulous to be a taking | Denied dismissal — claim plausibly alleges sufficiently direct/substantial U.S. involvement and benefit; facts require discovery |
| Whether the taking benefited the U.S. (public purpose/benefit) | Removal was intended to appease Djibouti during BAA negotiations to preserve/expand U.S. base operations — a U.S. benefit | Seizure resulted from customs investigation, not for U.S. benefit | Denied dismissal — plaintiff plausibly alleged a link to U.S. benefit; fact development needed |
| Whether the Court has jurisdiction over plaintiff’s breach-of-contract claim given 28 U.S.C. § 1502 (treaty-related claims barred) | Contract claim rests on KBR prime contract and does not require enforcement/construction of the BAA; claim can exist independently | Claim depends on BAA terms (tax/exemption/import/movement protections) so §1502 divests jurisdiction | Denied dismissal at pleading stage; Court permitted discovery to test whether claim derives from the treaty or can stand independently |
| Whether Global Freight sufficiently alleged third-party beneficiary status of the KBR prime contract (required for Tucker Act jurisdiction) | Incorporated Q&A and contract language, prior Navy tax-exoneration letters, and reliance while under PAE support an intent to benefit subcontractors like Global Freight | Pleading insufficient to show contracting officer intended to confer direct benefit to subcontractor | Denied dismissal — issue is mixed law/fact; plaintiff may obtain discovery to support third-party beneficiary inference |
Key Cases Cited
- Langenegger v. United States, 756 F.2d 1565 (Fed. Cir. 1985) (U.S. may be liable for a taking when foreign sovereign’s final expropriation follows sufficiently direct and substantial U.S. involvement)
- Aris Gloves, Inc. v. United States, 420 F.2d 1386 (Ct. Cl. 1970) (taking may occur when government action enables third party to obtain use or benefit of property)
- Porter v. United States, 496 F.2d 583 (Ct. Cl. 1974) (diplomatic persuasion alone is insufficient to attribute foreign expropriation to the U.S.)
- Jan’s Helicopter Serv. v. Fed. Aviation Admin., 525 F.3d 1299 (Fed. Cir. 2008) (Takings Clause is a money-mandating source for Tucker Act jurisdiction)
- Fisher v. United States, 402 F.3d 1167 (Fed. Cir. 2005) (Tucker Act requires a separate, money-mandating source of substantive law)
- United States v. Mitchell, 463 U.S. 206 (1983) (requirement that substantive law be money-mandating for Tucker Act jurisdiction)
- G4S Tech. LLC v. United States, 779 F.3d 1337 (Fed. Cir. 2015) (standards for establishing third-party beneficiary status of government contracts)
- Glass v. United States, 258 F.3d 1349 (Fed. Cir. 2001) (third-party beneficiary determination involves mixed questions of law and fact)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must plausibly show entitlement to relief)