119 Fed. Cl. 751
Fed. Cl.2015Background
- RQ Squared, LLC sues the United States in the Court of Federal Claims alleging an implied-in-fact contract and misappropriation of trade secrets related to USPS negotiations over a Dual Label System.
- RQ2 contends USPS engaged in negotiations (2005–2006) to adopt RQ2’s Dual Label concept and later used related information without compensation or confidentiality.
- The Dual Label System includes a single label with multiple bar codes enabling either FedEx or USPS processing, alongside a back-end software and tracking elements.
- USPS had its own Parcel Return Service (PRS) program; RQ2 alleges USPS disclosed its proprietary information to competitors (UPS/FedEx) during PRS discussions and implementation.
- Two later USPS/FedEx/FedEx collaborations (Flexible Access) and UPS/FedEx programs are argued by RQ2 to replicate the Dual Label concept.
- Plaintiff filed suit in 2010–2012 across courts; CDA claim was filed in 2012; Missouri registrations and corporate status issues are noted in the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of implied-in-fact contract to protect information | RQ2 asserts USPS breached an implied contract by disclosing and using its proprietary Dual Label system. | Government contends the pleadings fail to establish a plausible implied contract or its breach with sufficient facts. | Partial grant/denial: claims survive on pleadings to the extent not contradicted by outside evidence; discovery may narrow the issue. |
| Existence of an implied-in-fact contract to approve RQ2 as PRS provider | USPS formed an implied agreement to approve RQ2 as a PRS provider and to remunerate it for the Dual Label. | USPS only sought another PRS provider, not an implied contract to grant approval in advance of a final agreement. | Denied: new claim not plausible; not properly before court as an implied contract formed before final approval. |
| Plaintiff's plausibility of misappropriation via acts of disclosure | Disclosures by USPS to UPS/FedEx and replication of the Dual Label program show misappropriation. | Pleadings rely on speculative conclusions; no cogent showing that misappropriation occurred. | Plausibility found for the breach claim at the pleadings stage, but requires record discovery to resolve fully. |
| Whether to adopt summary judgment or defer pending discovery | Discovery will reveal USPS handling of Dual Label information and other germane facts that defeat summary judgment. | Discovery would be a fishing expedition; evidence insufficient to defeat summary judgment at this stage. | Deferral of summary judgment and narrowly tailored discovery is ordered; discovery limited to UPS declaration contentions. |
Key Cases Cited
- Atlas Corp. v. United States, 895 F.2d 745 (Fed. Cir. 1990) (standard for judgment on the pleadings similar to 12(b)(6))
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (S. Ct. 2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (S. Ct. 2009) (plausibility standard requires nonconclusory factual allegations)
- New Zealand Lamb Co. v. United States, 40 F.3d 377 (Fed. Cir. 1994) (pleading standards and implied-in-fact contract considerations)
- Pac. Gas & Elec. Co. v. United States, 738 F.2d 452 (Fed. Cir. 1984) (negotiations and written agreement considerations in contract formation)
- First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253 (S. Ct. 1968) (summary judgment standards and evidentiary burden)
- Simmons Oil Corp. v. Tesoro Petroleum Corp., 86 F.3d 1138 (Fed. Cir. 1996) (scope of discovery related to summary judgment)
- Theisen Vending Co. v. United States, 58 F.3d 194 (Fed. Cir. 2003) (liberal approach to RCFC 56(d) discovery)
- Gregory Lumber Co. v. United States, 9 Cl. Ct. 503 (Ct. Cl. 1986) (limits of discovery and summary judgment interaction)
- Monarch Assurance P.L.C. v. United States, 244 F.3d 1351 (Fed. Cir. 2001) (broad discretion to allow discovery in aid of summary judgment)
- Owen v. United States, 851 F.2d 1404 (Fed. Cir. 1988) (standard for evaluating Rule 12(c) motions)
- Cary v. United States, 552 F.3d 1373 (Fed. Cir. 2009) (12(c) standard aligns with 12(b)(6) standard)
- Xianli Zhang v. United States, 640 F.3d 1358 (Fed. Cir. 2011) (context-specific plausibility assessment)
- Curran v. Cousins, 509 F.3d 36 (1st Cir. 2007) (pleading standards and implied contract considerations)