United States v. Kellogg Brown & Root Services, Inc.
2012 U.S. Dist. LEXIS 56034
| D.D.C. | 2012Background
- United States sues Kellogg Brown & Root Services (KBR) for civil penalties and treble damages over $100 million in alleged false claims under FCA and LOGCAP III.
- Government alleges KBR billed for private security contractors in Iraq under LOGCAP III.
- Court previously dismissed unjust enrichment and payment-by-mistake claims but retained FCA and breach claims against KBR.
- KBR asserted as affirmative defense that government breached LOGCAP III by failing to provide required force protection and filed a recoupment counterclaim.
- Government moved to dismiss counterclaim and strike the affirmative defense on grounds including exhaustion of administrative remedies, judicial estoppel, political question, and failure to state a claim.
- Court grants the motion: dismisses KBR’s counterclaim without prejudice and strikes the first affirmative defense; allows potential amendment and limited discovery before staying proceedings
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is KBR’s counterclaim barred by judicial estoppel? | KBR’s tort positions are inconsistent with this contract context. | Differences between tort and contract contexts avoid estoppel; positions not clearly inconsistent. | No judicial estoppel; not barred at this stage. |
| Does the political question doctrine bar KBR’s counterclaim/defense? | Resolving would require second-guessing military judgments. | Discovery needed; not yet resolved. | Declined to rule now; may address after discovery. |
| Has KBR exhausted administrative remedies under the Contract Disputes Act? | Counterclaim must be presented to contracting officer; lack of exhaustion. | KBR provided notices; a protective claim was filed later. | Lacks jurisdiction; dismissal without prejudice pending exhaustion. |
| Does KBR’s counterclaim state a plausible recoupment claim? | Alleges general “adequate” force protection; no specifics tying to contract standard. | Allegations show officials conceded breach and reference LOGCAP III standard. | Dismissed for failure to plead breach of the specific force-protection standard (Clause H-16). |
| Is KBR’s first affirmative defense of material breach legally precluded by the contract? | LOGCAP III requires continuing performance despite government breach; defense fails under contract terms. | (Not expressly stated here) | Struck under Rule 12(f) as precluded by the contract. |
Key Cases Cited
- New Hampshire v. Maine, 532 U.S. 742 (2001) (judicial-estoppel factors and principles cited)
- Moses v. Howard Univ. Hosp., 606 F.3d 792 (D.C. Cir. 2010) (discretion in applying judicial-estoppel; consistency concerns)
- Carmichael v. Kellogg, Brown & Root Servs., Inc., 572 F.3d 1271 (11th Cir. 2009) (tort context; political-question concerns in military decision-making)
- El Shifa Pharm. Indus. Co. v. U.S., 607 F.3d 836 (D.C. Cir. 2010) (discriminating analysis for political-question applicability)
- Baker v. Carr, 369 U.S. 186 (1962) (six-factor political-question test; need case-specific analysis)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (political questions; non-justiciable when appropriately framed)
- Japan Whaling Ass’n v. Am. Cetacean Soc’y, 478 U.S. 221 (1986) (political-question doctrine framework)