Seh Ahn Lee v. United States
130 Fed. Cl. 243
| Fed. Cl. | 2017Background
- Plaintiffs (four long‑time contractors for Voice of America / the Broadcasting Board of Governors) alleged they were treated as personal‑service workers but were retained under nonpersonal service/vendor contracts and sought additional compensation.
- An OIG audit found the Board likely exceeded its limited statutory authority to award personal‑service contracts; plaintiffs rely on that report in their allegations.
- The court previously dismissed plaintiffs’ Back Pay Act and breach‑of‑implied‑contract claims for lack of jurisdiction and for failure to state a claim, and entered judgment in August 2016 (Lee v. United States, 127 Fed. Cl. 734).
- Plaintiffs moved for reconsideration and sought leave to file a second amended complaint preserving the Back Pay Act claim for appeal and adding (1) breach of express contract, (2) breach of implied contract based on alleged voidness of contracts, and (3) quantum meruit damages.
- The proposed amended complaint relied on contract samples and the OIG report to allege (a) express contracts were breached because the Board required personal services, (b) some work occurred without any express contract, and (c) the Board’s purported statutory excess rendered contracts void or voidable.
- The court held a hearing and denied both the motion for reconsideration and leave to amend, concluding plaintiffs failed to show extraordinary circumstances for reconsideration and that the proposed amendments were futile or jurisdictionally defective.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion for reconsideration (RCFC 59(e)) | Court should revisit dismissal because contracts were improperly classified and plaintiffs now clarify theories (express breach, voidness, quantum meruit) to prevent injustice | No intervening change in law or new evidence; plaintiffs merely reframe prior claims and could have raised new allegations earlier | Denied — plaintiffs failed to show manifest injustice or exceptional circumstances |
| Breach of express contract (Count II) | Contracts were breached because Board required personal‑service performance, deprived contractors of independent‑contractor rights, and paid lower vendor rates | Contracts’ plain language authorized on‑site work, government‑furnished equipment, and supervisory review; no breach of express terms alleged | Denied as futile — complaint fails to allege performance outside express contract scope or a breach of contractual duties |
| Breach of implied contract based on contract voidness (Count III) | Board exceeded statutory authority to award personal‑service contracts; contracts therefore void/voidable and plaintiffs may recover on implied contract or be paid fair market value | Even if Board erred, contracts are not plainly invalid; statutory/regulatory noncompliance does not automatically void fully performed contracts; express contracts control | Denied — contracts not shown to be void; express contracts preclude implied contract for same subject; reformation inappropriate |
| Quantum meruit (Count IV) | If contracts void or gaps existed between contracts, plaintiffs performed services for which they deserve fair market value above contract payments | Quantum meruit jurisdiction is limited; plaintiff must allege an express contract later rescinded for invalidity or unpaid contractual rates — neither shown | Denied — court lacks jurisdiction over quantum meruit because contracts are not shown invalid and plaintiffs do not allege underpayment or rescission |
Key Cases Cited
- Lee v. United States, 127 Fed. Cl. 734 (Fed. Cl. 2016) (prior dismissal of plaintiffs’ Back Pay Act and implied‑contract claims)
- Atlas Corp. v. United States, 895 F.2d 745 (Fed. Cir. 1990) (express contract precludes implied contract on same subject)
- United States v. Amdahl Corp., 786 F.2d 387 (Fed. Cir. 1986) (quantum meruit allowed only where express contract later rescinded as invalid)
- American Tel. & Tel. Co. v. United States, 177 F.3d 1368 (Fed. Cir. 1999) (court reluctant to invalidate government contracts for regulatory noncompliance unless illegality is plain)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleadings)
- Jowett v. United States, 234 F.3d 1365 (Fed. Cir. 2000) (interpretation of contract scope governed by plain language)
- S.J. Amoroso Constr. Co. v. United States, 12 F.3d 1072 (Fed. Cir. 1993) (Christian doctrine: mandatory procurement clauses incorporated by law)
- International Data Prods. Corp. v. United States, 492 F.3d 1317 (Fed. Cir. 2007) (limits on Court of Federal Claims jurisdiction over quantum meruit and implied‑in‑law claims)