Projects Management Company v. DynCorp International LLC
734 F.3d 366
4th Cir.2013Background
- PMC contracted with DynCorp to provide operations and maintenance in Iraq under a Subcontract; payment instructed to Kuwait Account with later Lebanon Account changes.
- PMC’s true owners were Al-Muhanna family; Fawaz and Byers represented him as owner and contact, with payments routed to the Lebanon Account during performance.
- DynCorp discovered funds paid into the Lebanon Account were used to pay PMC obligations, including Cater-Corp payments.
- PMC disclosed damages post-discovery close; claimed approximately $6.92 million in Lebanon Account payments as damages; unpaid invoices settled separately.
- District court granted partial summary judgment on modification and later sanctioned PMC for discovery abuses, ultimately dismissing PMC’s case with prejudice under its inherent authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal under the court’s inherent authority was proper. | PMC asserts dismissal is excessive given less severe sanctions were available. | DynCorp contends discovery abuses warrant dismissal due to prejudice and willful conduct. | Yes; dismissal affirmed due to severe, willful discovery abuses and prejudice. |
| Whether the damages measure used by PMC was proper under contract law. | PMC argues the measure is the total Lebanon Account payments plus unpaid invoices. | DynCorp asserts the measure wrongly excludes costs avoided and misstates damages under governing law. | Yes; court rejected PMC's damages measure and excluded damages. |
| Whether the district court properly sanctioned for false testimony and interrogatory responses. | PMC challenges the factual basis for sanctions and argues the court overreached. | DynCorp points to false deposition testimony and false interrogatory responses as grounds for sanctions. | Yes; the district court’s findings of false testimony and false interrogatory answers supported sanctions. |
| Whether lesser sanctions could have remedied the prejudice to DynCorp. | PMC contends that lesser sanctions suffice to protect integrity and allow merits-based adjudication. | DynCorp maintains lesser sanctions failed to cure prejudice and deter further conduct. | No; lesser sanctions were insufficient to remedy prejudice; dismissal appropriate. |
Key Cases Cited
- Shaffer Equip. Co. v. United States, 11 F.3d 450 (4th Cir. 1993) (inherent power to dismiss for abuse of process requires cautious, case-total analysis)
- Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) (public welfare requires courts to act against deception in justice administration)
- In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 278 F.3d 175 (3d Cir. 2002) (sanctions assessment under inherent authority involves totality of conduct)
- Silvestri v. Gen. Motors Corp., 271 F.3d 583 (4th Cir. 2001) (integrity of judicial process as public interest in sanctions analysis)
- United States v. Nat’l Med. Enters., Inc., 792 F.2d 906 (9th Cir. 1986) (circumstances permitting sua sponte sanctions under inherent authority)