Level 3 Communications, LLC v. United States
131 Fed. Cl. 73
| Fed. Cl. | 2017Background
- DISA awarded a March 8, 2016 contract to Verizon for a high‑availability telecommunications circuit that was $38.6M higher than Level 3’s bid; Level 3 filed a bid protest on July 12, 2016.
- Government representations (written Aug 23, 2016 and orally Sept 15, 2016) told the Court Verizon would not begin performance until December 1, 2016.
- In fact, Verizon began provisioning on June 29, 2016 and DISA accepted the completed circuit on November 1, 2016; the Court learned of this discrepancy in November 2016.
- The Court entered a TRO on Nov 14, 2016 and on Dec 5, 2016 ordered the Government to show cause why RCFC 11(b) was not violated by its written and oral statements.
- Government responded arguing its statements were accurate in context, supported by a declaration, intended to show injunction harm, and reflected ongoing agency actions.
- The Court concluded the Government did not violate RCFC 11(b) but did breach the duty of candor to the tribunal and declined Rule 11 sanctions, instead referring internal supervisory action (adverse report) to the Govt. supervisor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Government violated RCFC 11(b) by representing performance would not begin until Dec 1, 2016 | Gov't statements were false/misleading and induced the Court not to enjoin performance | Statements were accurate in context, supported by CO declaration, and made to show injunction would delay completion | Court: No RCFC 11(b) violation — factual contentions excused under objective reasonableness standard (b)(3)/(4) |
| Whether Government breached the duty of candor to the court | Level 3: court was misled and duty to update was breached | Govt: believed statements were reasonable and relied on agency information | Court: Duty of candor breached — Government failed to timely inform the court that performance had commenced |
| Whether sanctions under Rule 11 or other remedies were appropriate | Requested sanctions and fees for misleading the court | Govt urged no sanctions; framed conduct as misunderstanding | Court: Declined Rule 11 sanctions but warned and left personnel response to supervisory discretion (adverse report suggested) |
| Whether court relief (TRO/injunction) was affected by misrepresentations | Level 3 argued misrepresentations impeded injunctive relief and harmed its interests | Govt argued representations showed irreparable harm from enjoining Verizon | Court: Misrepresentations materially affected injunction calculus; TRO entered earlier; ultimate remedy limited to candor finding and administrative referral |
Key Cases Cited
- Judin v. United States, 110 F.3d 780 (Fed. Cir.) (Rule 11 requires reasonable pre‑filing inquiry)
- Precision Specialty Metals, Inc. v. United States, 315 F.3d 1346 (Fed. Cir.) (counsel distorted authorities; Rule 11 and inherent powers implicated)
- 1-10 Industry Associates, LLC v. United States, 528 F.3d 859 (Fed. Cir.) (objective reasonableness standard; notice requirements for sanctioning prior conduct)
- Chambers v. NASCO, Inc., 501 U.S. 32 (U.S.) (courts may use inherent power to sanction bad‑faith conduct when rules are inadequate)
- Bd. of License Comm’rs of Town of Tiverton v. Pastore, 469 U.S. 238 (U.S.) (continuing duty to inform the court of developments)