Shell Oil Company v. United States , 896 F.3d 1299 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
SHELL OIL COMPANY, ATLANTIC RICHFIELD
COMPANY, TEXACO, INC., UNION OIL COMPANY
OF CALIFORNIA,
Plaintiffs-Appellees
v.
UNITED STATES,
Defendant-Appellant
______________________
2017-1695
______________________
Appeal from the United States Court of Federal
Claims in Nos. 1:06-cv-00141-SGB, 1:06-cv-01411-SGB,
Senior Judge Susan G. Braden.
______________________
Decided: July 18, 2018
______________________
MICHAEL W. KIRK, Cooper & Kirk, PLLC, Washington,
DC, argued for plaintiffs-appellees. Also represented by
JOSE JOEL ALICEA, VINCENT J. COLATRIANO, WILLIAM C.
MARRA.
FRANKLIN E. WHITE, JR, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellant.
Also represented by CHAD A. READLER, ROBERT E.
KIRSCHMAN, JR., STEPHEN CARL TOSINI.
2 SHELL OIL CO. v. UNITED STATES
CHRISTOPHER MARRARO, Baker & Hostetler LLP,
Washington, DC, for amicus curiae American Fuel &
Petrochemical Manufacturers. Also represented by
RICHARD BRYAN RAILE.
DANIEL MAX STEINWAY, Baker Botts, LLP, Washing-
ton, DC, for amicus curiae Exxon Mobile Corporation.
Also represented by MICHAEL PATRICK MCGOVERN.
______________________
Before PROST, Chief Judge, WALLACH and CHEN, Circuit
Judges.
WALLACH, Circuit Judge.
This case returns to us for a third time. Following
two remands on liability determinations, see Shell Oil Co.
v. United States (Shell II), 751 F.3d 1282, 1285−90 (Fed.
Cir. 2014); Shell Oil Co. v. United States (Shell I), 672
F.3d 1283, 1285 (Fed. Cir. 2012), the U.S. Court of Feder-
al Claims issued two orders, which are the subject of the
present appeal. In its 2015 Order, the Court of Federal
Claims (1) granted appellees Shell Oil Company, Atlantic
Richfield Company, Texaco, Inc., and Union Oil Company
of California’s (collectively, “the Oil Companies”) motion
for partial summary judgment to prevent discovery into
any insurance coverage settlements and policies, and
(2) denied appellant the United States’ (“Government”)
motion for leave to amend its answer to assert counter-
claims in fraud. See Shell Oil Co. v. United States (Shell
III), 123 Fed. Cl. 707, 714−15, 727 (2015). In its 2017
Order, the Court of Federal Claims awarded damages in
the amount of $99,509,847.32 to the Oil Companies for
breach of certain contracts entered into during World War
II to produce 100-octane aviation gasoline (“avgas”) (the
“Avgas Contracts”) for the war effort. See Shell Oil Co. v.
United States (Shell IV), 130 Fed. Cl. 8, 11−13 (2017).
SHELL OIL CO. v. UNITED STATES 3
The Government appeals. We have jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(3) (2012). We affirm.
BACKGROUND
I. The Avgas Contracts 1
In 1942 and 1943, the Government contracted with
the Oil Companies to purchase avgas, “the most critically
needed refinery product during World War II.” Shell II,
751 F.3d at 1285 (internal quotation marks omitted). 2
Under the Avgas Contracts, the Government would
purchase large quantities of avgas, and would “enable[]
the Oil Companies to build the new refining facilities
needed to produce the high levels of avgas vital to the war
effort.” Id.; see, e.g., J.A. 1467−90 (April 10, 1942 con-
tract), 1560−88 (May 1, 1943 contract). The Avgas Con-
tracts permitted a profit margin for the Oil Companies of
“between 6% and 7%.” Shell II, 751 F.3d at 1287. “Given
the low profit margin,” the Avgas Contracts “contained
various concessions to the Oil Companies.” Id.; see id.
(describing contract clauses wherein the “agreed-upon
base price of avgas was subject to adjustment depending
on the Oil Companies’ costs” and contracts were signed for
“three-year[s]” to “provid[e] some measure of certainty
that the newly-constructed avgas production facilities
1 The relevant factual and procedural background
has been set forth in earlier opinions. See Shell II, 751
F.3d at 1285−90; Shell IV, 130 Fed. Cl. at 12−34; Shell
III, 123 Fed. Cl. at 710−15. Therefore, only the facts
necessary for an understanding of the issues that give rise
to this appeal are discussed here. We cite to these prior
opinions where facts are undisputed.
2 The Oil Companies entered into three-year con-
tracts to sell avgas to the Government between January
17, 1942, and May 1, 1943. See Shell IV, 130 Fed. Cl. at
13 nn.4−7; see also Shell II, 751 F.3d at 1287.
4 SHELL OIL CO. v. UNITED STATES
would pay off over time”). Under the Avgas Contracts,
“avgas production increased over twelve-fold” from 1941
to 1945, and “was crucial to Allied success in the war.” Id.
(footnote omitted).
II. The Oil Companies’ Production of Avgas and Disposal
of Associated Waste Products
The manufacture of avgas from crude oil uses a 98%
purity sulfuric acid to serve as a catalyst in a process
known as alkylation. Id. at 1288. The alkylation process
dilutes the sulfuric acid such that it turns it into a waste
product called “spent alkylation acid.” Id. Spent alkyla-
tion acid may be used to (1) catalyze the alkylation pro-
cess again following purification; (2) produce non-avgas
petroleum by-products; or (3) be disposed of as waste. Id.
If spent alkylation acid is used to produce other non-
avgas petroleum by-products, it becomes a secondary
waste product with a lesser percentage of acid content
called “acid sludge.” Id. Acid sludge can be (1) used to
manufacture fertilizer; (2) burned; or (3) disposed. See
Shell IV, 130 Fed. Cl. at 22 (stating “both of the parties’
petroleum engineering experts essentially agreed on how
crude oil was processed”).
The Avgas Contracts placed no restrictions on how the
Oil Companies could use the spent alkylation acid that
resulted from catalyzing crude oil to produce avgas. See,
e.g., J.A. 1467−90, 1560−88. The Oil Companies used
some of the spent alkylation acid to acid treat other
products and produce non-avgas petroleum by-products.
Shell IV, 130 Fed. Cl. at 23, 29. Unable to reprocess the
increased amount of spent alkylation acid given the
Government’s prioritization of production over repro-
cessing, 3 the Oil Companies dumped additional spent
3 “The Government twice refused applications to
construct new acid processing facilities,” and “the scarcity
SHELL OIL CO. v. UNITED STATES 5
alkylation acid, along with acid sludge, on property in
California owned by Eli McColl (“the McColl site”). Shell
II, 751 F.3d at 1285, 1288; see Shell IV, 130 Fed. Cl. at
29. 4 Twelve percent of the waste dumped at the McColl
site was spent alkylation acid, and 82.5% was acid sludge
resulting from the treatment of non-benzol products.
Shell II, 751 F.3d at 1288. 5 The McColl site closed on
September 6, 1946. Shell IV, 130 Fed. Cl. at 14.
III. The Relevant Procedural History
In 1991, the Government and California sued the Oil
Companies under the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”),
42 U.S.C. §§ 9601 et seq., for costs of cleaning up the
McColl site. Shell II, 751 F.3d at 1285. The Oil Compa-
nies countersued, alleging the Government was jointly
and severally liable for clean-up costs under CERCLA.
Id. at 1289; see 42 U.S.C. § 9607(a)(3) (extending
CERCLA liability to “any person who by contract, agree-
ment, or otherwise arranged for disposal or treatment, or
arranged with a transporter for transport for disposal or
treatment, of hazardous substances”). After twelve years
of litigation, the Ninth Circuit held that the Oil Compa-
nies were liable for all clean-up costs (including cleanup of
of available railroad tank cars (and the [Government’s]
refusal to make transportation of acid waste a priority)
meant the Oil Companies were unable to transport acid
sludge for reprocessing or other uses.” Shell II, 751 F.3d
at 1288.
4 The Oil Companies also continued to burn limited
quantities of acid sludge until 1944. See Shell II, 751
F.3d at 1288; Shell IV, 130 Fed. Cl. at 25 & nn. 23, 24.
5 The remaining 5.5% of waste was comprised of ac-
id sludge from treatment of benzol. See Shell II, 751 F.3d
at 1288 (differentiating between benzol and non-benzol
acid sludge).
6 SHELL OIL CO. v. UNITED STATES
benzol and non-benzol acid waste) at the McColl site and
the Government was liable under CERCLA only for clean-
up costs with respect to the disposal of benzol acid waste,
United States v. Shell Oil Co., 294 F.3d 1045, 1056,
1060−62 (9th Cir. 2002), which comprised 5.5% of the
waste remediated at the McColl site, see Shell II, 751 F.3d
at 1288.
The Oil Companies filed a new complaint in the Court
of Federal Claims, seeking reimbursement for CERCLA
costs of the non-benzol acid waste clean-up under a
breach of contract theory. Id. at 1289. They argued that
a clause in the Avgas Contracts in which the Government
agreed to reimburse the Oil Companies for “any new or
additional . . . charges . . . which [the Oil Companies] may
be required . . . to collect or pay by reason of the produc-
tion, manufacture, sale[,] or delivery of [avgas],” J.A. 1482
(emphasis added), entitled them to remediation costs at
the McColl site, see Shell II, 751 F.3d at 1290−91. “Be-
cause there was extensive discovery and the parties
entered into comprehensive stipulations of fact in the
underlying CERCLA action [in the Ninth Circuit], the
parties agreed that no further factual development was
necessary . . . .” Shell I, 672 F.3d at 1285. Therefore, “the
case was litigated on successive summary judgment
motions―one as to liability and the other relating to
damages.” Id. However, following our initial remand and
vacatur of the Court of Federal Claims’ liability and
damages determinations in Shell I, see id. at 1294, the
Court of Federal Claims stated that, with respect to
damages, “the issue of what portion of the non-benzol
waste was created ‘by reason of’ the avgas program
raise[d] factual questions that [were] simply not ade-
quately answered by the evidence or stipulations current-
ly before the [c]ourt,” Shell Oil Co. v. United States, 108
Fed. Cl. 422, 446, 448 (2013). The Court of Federal
Claims made these statements “[n]otwithstanding [its]
holding that the Oil Companies’ indemnification claims
SHELL OIL CO. v. UNITED STATES 7
fail as a matter of law,” id. at 445; in other words, it did
not decide the issue of damages on remand because it
found the Government did not breach the Avgas Con-
tracts, see Shell II, 751 F.3d at 1289.
In Shell II, we reversed, holding that “[t]he Avgas
Contracts require reimbursement of the Oil Companies’
CERCLA costs [for clean-up of non-benzol-related waste],”
id. at 1290 (capitalization modified), and remanded be-
cause the parties did “not contest the trial court’s finding
of a genuine dispute regarding how much of the acid
waste at the McColl site resulted from the [A]vgas
[C]ontracts,” id. at 1303. 6 The Court of Federal Claims
then reopened the record for further discovery on damag-
es. See Shell III, 123 Fed. Cl. at 714.
During discovery, the Government requested, for the
first time in the litigation before the Court of Federal
Claims, information related to the Oil Companies’ insur-
ance policies and any insurance coverage settlements that
included clean-up costs at the McColl site. Id.; see
J.A. 142−45 (stating, in a press release, that Shell Oil
Company received insurance settlements for its environ-
mental coverage claims based on filings against insurers
in the early 1990s). The Government also filed a Motion
6 We also held that the Government was not collat-
erally estopped by the “prior CERCLA litigation” “from
challenging the amount of acid waste attributable to the
[A]vgas [C]ontracts” because “[t]he Ninth Circuit did not
rely on or incorporate the district court’s attribution
holding with respect to the non-benzol waste.” Shell II,
751 F.3d at 1303; see Shell Oil, 294 F.3d at 1062 (revers-
ing, in the Ninth Circuit, the district court’s holding that
the Government was liable for non-benzol acid waste
clean-up under CERCLA and finding this holding “ren-
ders moot the [Government’s] appeal of the district court’s
allocation of liability . . . as to the non-benzol waste”).
8 SHELL OIL CO. v. UNITED STATES
for Leave to Amend, seeking to amend its answer to
assert counterclaims related to the insurance settlements
based on various theories of fraud. See Shell III, 123 Fed.
Cl. at 715. The Oil Companies opposed the Motion to
Amend, and both parties filed motions for partial sum-
mary judgment on the issue. Id. at 714−15.
The Court of Federal Claims held the following in
Shell III: (1) the Government could not engage in discov-
ery related to the Oil Companies’ insurance policies or
settlements because it waived any arguments related to
an insurance offset by not raising them in its Answer in
2008 to the Oil Companies’ initial breach of contract claim
before the Court of Federal Claims, id. at 719;
(2) alternatively, it would exceed the scope of our mandate
in Shell II to allow the Government to raise arguments
based on any insurance offset, id. at 721; and (3) the
Government could not amend its pleadings at such a late
stage in the litigation, id. at 727.
Following the close of discovery and oral arguments,
the Court of Federal Claims issued its order on damages
in Shell IV. It considered “new evidence not previously
considered by the . . . Federal Circuit,” 130 Fed. Cl. at 36
(emphasis omitted), and held that the Government was
liable for all of the Oil Companies’ clean-up costs for non-
benzol waste at the McColl site, id. at 38. The Court of
Federal Claims allocated a total award of $99,509,847.32,
including accrued interest, accordingly: $58,292,868.56 to
Shell Oil Company, $18,847,165.08 each to Union Oil
Company of California and Atlantic Richfield Company,
and $3,522,648.60 to Texaco, Inc. Id. at 42.
DISCUSSION
The Government makes three primary arguments
challenging the Court of Federal Claims’ Orders. The
Government argues the Court of Federal Claims
(1) “failed to allocate between recoverable and non-
recoverable costs,” Appellant’s Br. 23 (capitalization
SHELL OIL CO. v. UNITED STATES 9
omitted); see id. at 23−33; (2) “wrongfully admitted stipu-
lations” into evidence to calculate damages, id. at 41
(capitalization omitted); see id. at 41−51; and (3) “wrongly
refused to allow the Government to prove double recov-
ery,” by showing payment of the same costs by insurance
settlements, id. at 33 (capitalization omitted); see id. at
33−41. We address each argument in turn.
I. Challenges to the 2017 Order
A. Standards of Review
We review the Court of Federal Claims’ legal conclu-
sions de novo and its factual findings for clear error. See
John R. Sand & Gravel Co. v. United States, 457 F.3d
1345, 1353 (Fed. Cir. 2006). “A finding may be held
clearly erroneous when the appellate court is left with a
definite and firm conviction that a mistake has been
committed.” Ind. Mich. Power Co. v. United States, 422
F.3d 1369, 1373 (Fed. Cir. 2005) (internal quotation
marks, ellipsis, and citation omitted).
“This court provides the trial court with wide discre-
tion in determining the appropriate quantum of damag-
es.” Sys. Fuels, Inc. v. United States, 666 F.3d 1306, 1310
(Fed. Cir. 2012) (citation omitted). When reviewing
damages awarded by the Court of Federal Claims,
“[d]ifferent standards of review are applicable to different
aspects of a damages award.” Home Sav. of Am., FSB v.
United States, 399 F.3d 1341, 1346 (Fed. Cir. 2005). “This
court has held that the amount of a prevailing party’s
damages is a finding of fact. Thus, where the amount is
fixed by the court, review is in accordance with the clearly
erroneous standard.” Id. (internal quotation marks,
ellipsis, and citation omitted). “[T]he clear error standard
governs . . . findings about the general type of damages to
be awarded . . . , their appropriateness . . . , and rates
used to calculate them.” Id. “However, certain subsidiary
decisions . . . are . . . reviewed under the abuse of discre-
tion standard.” Id. at 1347. “The abuse of discretion
10 SHELL OIL CO. v. UNITED STATES
standard applies to decisions about methodology for
calculating rates and amounts.” Id. at 1346−47 (citation
omitted). A court abuses its discretion when (1) its “deci-
sion is clearly unreasonable, arbitrary or fanciful”; (2) “the
decision is based upon an erroneous construction of the
law”; (3) its “factual findings are clearly erroneous”; or
(4) “the record contains no evidence upon which the [trial]
court could have rationally based its decision.” Hi-Shear
Tech. Corp. v. United States, 356 F.3d 1372, 1377−78
(Fed. Cir. 2004) (internal quotation marks and citation
omitted) (alterations in original).
B. The Court of Federal Claims Did Not Err in Determin-
ing the Amount of Waste Attributable to the Avgas Con-
tracts
The Government raises four arguments on appeal as
to why the Court of Federal Claims “failed to allocate
between recoverable and non-recoverable costs” when it
found all of the clean-up costs attributable to avgas pro-
duction for the Avgas Contracts. Appellant’s Br. 23
(capitalization omitted). Specifically, the Government
contends that the Court of Federal Claims failed to
(1) follow our instructions for allocation based on the
language in the Avgas Contracts, see id. at 23−28;
(2) properly discount pre-contract activities, see id. at 31;
(3) discount dumping from non-avgas waste, see id. at 21,
24−25, 31; and (4) discount dumping from non-contractual
avgas production waste, see id. at 21, 24, 27. We disagree
with the Government. 7
7 Although the Government also argued in its brief-
ing that “[t]he trial court misapplied the governing causa-
tion standard” when it applied the three part test from
Indiana Michigan Power Co., Appellant’s Br. 23 (capitali-
zation omitted); see id. at 28−33, the Government dis-
claimed these assertions at oral argument, see Oral Arg.
SHELL OIL CO. v. UNITED STATES 11
1. Contract Interpretation and Shell II
The Government argues that the Court of Federal
Claims’ fundamental legal error was its failure to apply
“longstanding canons of contractual interpretation” to
allocate costs based on the language of the relevant clause
in the Avgas Contracts. Id. at 26; see id. at 25 (citing the
contractual clause that “charges” will be incurred “by
reason of the production, manufacture, sale[,] or delivery
of the commodities delivered hereunder” (emphasis omit-
ted)); see also id. at 25−28. However, the Government
misunderstands the limited inquiry of the damages
analysis. We determined in Shell II that the Government
was required to pay all “CERCLA costs incurred ‘by
reason of’ the [A]vgas [C]ontracts,” 751 F.3d at 1293
(emphasis added), and remanded for “a trial on damages,”
including the factual question of “how much acid waste at
the McColl site” was attributable to the Avgas Contracts,
id. at 1303. As the Government acknowledges, see Appel-
lant’s Br. 29, by reason of “requires at least a showing of
‘but for’ causation,” Burrage v. United States, 571 U.S.
204, 213 (2014). The Court of Federal Claims used this
but for direct causation inquiry to determine that all costs
incurred were a result of the Avgas Contracts, based on
our instruction. See Shell IV, 130 Fed. Cl. at 38. There-
fore, on remand, further contract interpretation was not a
necessary part of the damages inquiry.
The Government appears to argue that because we
acknowledged in Shell II that factual questions remained
as to the amount of waste that resulted from the Avgas
Contracts, see 751 F.3d at 1302−03, we required the Court
at 1:00−10, http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2017-1695.mp3 (Q: “You’re not challeng-
ing the use of the test? A: “No . . . we’re not challenging
the use of a test for how you determine damages in the
event of a breach.”).
12 SHELL OIL CO. v. UNITED STATES
of Federal Claims to make a finding on remand that some
of the acid waste was not attributable to the Avgas Con-
tracts, see Appellant’s Br. 23 (asserting the Court of
Federal Claims “misinterpret[ed] . . . the [Federal Cir-
cuit’s] mandate”), 24−28 (similar). We set no such re-
quirement. In Shell II, we acknowledged that “a genuine
dispute” on the issue remained, 751 F.3d at 1303, and
entrusted the Court of Federal Claims to conduct an
attribution analysis. The Court of Federal Claims was
free to determine that some, or all, of the acid waste at
the McColl site was attributable to the Avgas Contracts,
and use this factual finding in its ultimate consideration
of the amount of CERCLA costs incurred as a result of the
Avgas Contracts to award damages.
2. Consideration of Pre-Contract Activities
The Government argues the Court of Federal Claims
clearly erred in its findings on the amount of damages to
award because the but for world should have been calcu-
lated from the Oil Companies’ “pre-contract activities.”
Appellant’s Br. 31. This is so, it avers, because “the[ Oil
Companies] had been dumping waste at the McColl site
months before selling any avgas under the contracts.” Id.
The Court of Federal Claims considered this argument,
see Shell IV, 130 Fed. Cl. at 36, but found it unpersuasive.
Instead, the Court of Federal Claims decided the relevant
hypothetical for the non-breach world would be 1946, and
found that “none of the Oil Companies disposed of acid
waste at the McColl [s]ite in 1946.” Id.
The Court of Federal Claims did not err in its consid-
eration of pre-contract activities. In adopting the year
1946 as the relevant timeframe for the but for analysis, at
which time the Oil Companies did not dump any spent
alkylation acid or acid sludge at the McColl site, see id.
(citing to evidence that “avgas production plummeted in
1946 to pre-Contract levels” (emphasis added)), the Court
of Federal Claims gave greater weight to the Oil Compa-
SHELL OIL CO. v. UNITED STATES 13
nies’ evidence that 1946 reflected “‘normal’ refinery opera-
tions,” as opposed to the Government’s proposed year of
1941, because “by early 1940, the Oil Companies already
began to increase the production of military avgas,” id.;
see id. (citing a 1940 letter indicating the Government
was ready to buy avgas immediately). 8 Moreover, the
Government did not propose any allocation method that
would take into consideration pre-contract dumping for
the Court of Federal Claims to consider until its post-trial
briefing. See id. at 35−36 (stating the Government “took a
different tack in its closing argument” after it “mis-
stat[ed] the but[ ]for causation standard”); Oral Arg. at
11:39−45 (“We did propose in our post-trial brief in this
case a method of potentially allocating these
waste[s] . . . .”). Given the evidence presented, “[i]t was
proper for the [Court of Federal Claims] to resolve con-
flicting testimony by weighing the evidence and making
its own findings.” Precision Pine & Timber, Inc. v. United
States, 596 F.3d 817, 833 (Fed. Cir. 2010); see id. (stating
that we give “great deference” to a trial court’s determina-
tions of assigning weight to competing evidence (internal
quotation marks and citation omitted)).
8 The Government ignores the historical fact that
prior to the U.S. Congress’ declaration of war on Decem-
ber 8, 1941, the United States had limited powers to order
avgas production by fiat. Following the Declaration, the
Government could and did direct the Oil Companies on
means, methods, and priorities of production. See Exec.
Order No. 9276, 7 Fed. Reg. 10,091, 10,091 (Dec. 2, 1942)
(establishing the Petroleum Administration for War and
defining its functions and duties); cf. Evan J. Wallach,
The Use of Crude Oil by an Occupying Belligerent State
as a Munition de Guerre, 41 Int’l & Comp. L.Q. 287, 293,
300 (1992) (discussing international law rules and Ameri-
can practice for treating crude oil as a war material
subject to commandeering for military purposes).
14 SHELL OIL CO. v. UNITED STATES
3. Allocation of Acid Sludge from Avgas Production Under
the Avgas Contracts
The Government next avers that the Court of Federal
Claims failed to conduct a proper damages calculation
because it included acid sludge from “many other com-
modities in addition to avgas” that the Oil Companies
produced during the contractual period, Appellant’s
Br. 24, such as “motor fuel and other products,” id. at 26;
see id. at 28 (citing Shell II, 751 F.3d at 1288, which
explained that 82.5% of waste dumped was acid sludge
resulting from chemical treatment of non-avgas petrole-
um products).
The Court of Federal Claims did not clearly err in its
determination regarding acid sludge from non-avgas
products. All acid sludge created from the production of
non-avgas components, such as motor fuel, began as
sulfuric acid that was catalyzed with crude oil during the
process to create avgas and became spent alkylation acid
in need of waste disposal. See J.A. 1868 (presenting a
stipulation by the Government that “[m]ost of the acid
waste at the McColl [s]ite began as fresh sulfuric ac-
id . . . that was used in the alkylation units to produce
alkylate for avgas” (brackets omitted)), 1932−37 (explain-
ing, by the Oil Companies’ expert, that the Oil Companies
produced “unnecessary non-avgas products in order to
maximize avgas production”), 11804 (stating, by the
Government’s expert, that acid sludge produced from
treatment of non-avgas by-products is “the result of the
production of alkylate in the alkylation unit for avgas”).
Thus, even if the acid sludge was a secondary waste
product, it is still directly related to the initial reaction
used to create avgas under the Avgas Contracts. See
Swiff-Train Co. v. United States, 793 F.3d 1355, 1363
(Fed. Cir. 2015) (holding injured parties need not “isolate
the injury caused by” a particular factor, or limit damages
calculations to “the ‘principal’ cause of injury” to meet the
“by reason of” statutory causation standard). Moreover,
SHELL OIL CO. v. UNITED STATES 15
the Avgas Contracts explicitly acknowledged that avgas
production would necessarily result in the production of
acid sludge produced from treatment of non-avgas prod-
ucts, see J.A. 1475 (“[S]ubstantial quantities of motor fuel
and other products must necessarily be produced and sold
in connection with production of [avgas].”), and still
provided that the Government would pay for “any” charg-
es related to the production of avgas, J.A. 1482 (emphasis
added).
Further, the Court of Federal Claims considered the
by-products and determined they still created waste
attributable to the Avgas Contracts because the Govern-
ment, by setting only a 6−7% profit margin for the sale of
avgas, “was aware that the Oil Companies had to maxim-
ize revenues from all non-avgas petroleum by-products or
be at risk of having to ask the Government to increase
their profit margins,” and “make every effort to recycle
and reuse both spent alkylation acid and acid sludge to
keep the costs of avgas production down.” Shell IV, 130
Fed. Cl. at 35 (emphasis omitted); see id. at 36 (citing a
Government survey from 1941 which asked “what provi-
sions will be made for . . . handling resultant [acid]
sludge?” (alterations in original)). 9 The Oil Companies
9 At oral argument, the Government stated that, if
the Oil Companies had not repurposed spent alkylation
acid into by-products and instead dumped the acid, the
Government would not contest its obligation to reimburse.
See Oral Arg. at 13:50−14:36 (Q: “Are you saying, then,
that what the Oil Companies should have done with the
spent alkylation acid is just to have dumped it rather
than to have . . . repurposed it . . . ?” A: “Yes.”). Given
the Court of Federal Claims’ earlier findings related to
the Government’s understanding of the Avgas Contracts,
which are uncontested on appeal, see generally Appel-
lant’s Br., we find the Government’s new theory jejune.
16 SHELL OIL CO. v. UNITED STATES
even presented evidence that they tried to “reprocess[] as
much acid sludge into [non-waste] fertilizer as possible,”
id. at 25, but were stymied in their ability to do so be-
cause of the Government’s refusal to allocate rail cars to
transport the acid sludge to reprocessing facilities, id.; see
J.A. 1964 (stating that, until 1945, only one plant in
southern California “could reprocess significant quantities
of acid sludge”), 9449 (providing statement by Oil Compa-
nies’ witness that “[t]he [G]overnment will not allow us to
use the tank cars for that purpose. . . . We have to dispose
of [the acid sludge], and I tell you in all sincerity, this
must go on. We must make [avgas]”). We do not find
clear error based on these facts.
4. Allocation of Acid Sludge from Non-Contractual Avgas
Production
Finally, the Government contests the Court of Federal
Claims’ inclusion of waste from the production of non-
contractual avgas. See Appellant’s Br. 27 (disputing
“‘charges’ relating to non-[contractual] avgas”). 10 The
Court of Federal Claims found that, even if a small per-
centage of waste “nominally could be attributed” to non-
contractual avgas sales, the manner of clean up at the
site, which “result[ed] from the increased production of
avgas” and hence the multiple “contaminants of concern,”
created a scenario where the waste resulting from the
Avgas Contracts mandated a large scale remediation
solution. Shell IV, 130 Fed. Cl. at 37, 38; see id. at 32−33
(discussing expert testimony on clean up method chosen).
10 At oral argument, the Government stated that it
believed this avgas was also being purchased by the
Government, outside of the contractual scheme. See Oral
Arg. at 16:29−36 (claiming the non-contractual avgas was
“likely being sold to the Government, just probably direct-
ly to the military services”).
SHELL OIL CO. v. UNITED STATES 17
The Court of Federal Claims did not clearly err in this
determination. Contrary to the Government’s contention,
the Court of Federal Claims did not “allocate 100 percent
of all response costs” “once it found a drop of waste relat-
ed to avgas production.” Appellant’s Br. 29. The Court of
Federal Claims reasoned that the waste dumped by the
Avgas Contracts caused all of the remediation costs, given
the need for a broad containment clean up based on the
size and scale of the contaminants. Shell IV, 130 Fed. Cl.
at 38 (applying “but for” language to the non-contractual
avgas analysis). The Court of Federal Claims’ determina-
tion to allocate all remediation costs to the Government
was further supported by the reasons detailed earlier in
its Order explaining the difficulties of disposing of acid
waste due directly to the Avgas Contracts’ requirement to
ramp up production immediately. See id. at 35 & n.40
(discussing Government’s knowledge of the expense of
waste disposal and that a prior disposal site “was reach-
ing capacity” when the Avgas Contracts were signed),
35−36 (discussing “how much acid waste disposed of at
the McColl [s]ite was caused by the increased avgas
production and need to maximize the manufacture and
sale of non-avgas petroleum by-products”), 36 n.41 (stat-
ing it was possible after the war for all “acid sludge pro-
duced . . . [to be] sent for reprocessing via tank cars or
pipelines”).
Moreover, as the Court of Federal Claims acknowl-
edged, there is no evidence that any of the waste that may
have derived from the production of non-contractual sales
of avgas was actually dumped at the McColl site. See id.
at 36−37 (“The record . . . does not establish that any of
the spent alkylation acid that resulted from the sale of
this avgas was disposed of at the McColl [s]ite . . . . The
record . . . reflects that for the entire year 1943, Shell
disposed of 112,367 barrels of sludge at the McColl [s]ite,
an unknown amount of which could be attributed to non-
[contractual] customers.”), 37 (hypothesizing “nominally
18 SHELL OIL CO. v. UNITED STATES
attributed” acid sludge waste in 1943 at “3.6%”); cf. Appel-
lees’ Br. 20−33 (citing to J.A. 1868, 1931−32) (arguing
that all waste at the McColl site was generated by avgas
production under the Avgas Contracts). The Government
does not make any supported argument to rebut these
findings. See Appellant’s Br. 24 (asserting that the Oil
Companies generally were producing “non-contract avgas”
but offering no evidence where waste from that produc-
tion was dumped). See generally id. Absent evidence to
the contrary, we will not find that the Court of Federal
Claims erred in its determination that all costs of waste
remediation at the McColl site were attributable to the
Avgas Contracts. See Ind. Mich. Power Co., 422 F.3d at
1373; see also Jones v. Dep’t of Health & Human Servs.,
834 F.3d 1361, 1369 (Fed. Cir. 2016) (“Unsubstantiated
assertions do not equate to evidence.” (internal quotation
marks, brackets, and citation omitted)).
C. The Court of Federal Claims Did Not Abuse Its Discre-
tion in Its Determination of Damages with Reasonable
Certainty
The Court of Federal Claims also determined that the
Oil Companies had proven their damages with “reasona-
ble certainty,” as required under the applicable legal
standard for damages. Shell IV, 130 Fed. Cl. at 41; see id.
at 41−42; see also Ind. Mich. Power Co., 422 F.3d at 1373(stating plaintiff must show damages “with reasonable
certainty”). The Government asserts the Court of Federal
Claims erred in determining that damages had been
shown with reasonable certainty when it “admitted stipu-
lations despite language in those stipulations prohibiting
their use at trial” and “failed to require proof of costs” for
each of the Oil Companies. Appellant’s Br. 41, 48 (capi-
talization omitted). We disagree with the Government.
1. Reliance on Stipulations
In its damages calculation, the Court of Federal
Claims looked to as “relevant, admissible, and reliable
SHELL OIL CO. v. UNITED STATES 19
evidence,” Shell IV, 130 Fed. Cl. at 41 (citation omitted),
inter alia, a stipulation from October 13, 1999 (“the Stipu-
lation”), entered into during the litigation in the Ninth
Circuit, in which the parties stated the total amount of
remediation costs through 1998, excluding interest, see
J.A. 1851−58, along with statements made by both parties
in the earlier litigation (“Parties’ Statements”), see
J.A. 1859−910; see also Shell IV, 130 Fed. Cl. at 38−39,
79. The Court of Federal Claims found these documents
showed that the Oil Companies were entitled to
$64,219,514.46 in total remediation costs for the period up
to 1998, including $18,000,000 paid in 1994,
$46,219,514.46 paid by 1997, and certain interest pay-
ments on both these costs. See Shell IV, 130 Fed. Cl. at
40, 42.
The Court of Federal Claims did not abuse its discre-
tion by crediting the Stipulation and Parties’ Statements
to make its damages calculation through 1998. 11 See
Home Sav. of Am., 399 F.3d at 1346−47 (reviewing meth-
odology for damages calculation for abuse of discretion).
“[R]easonable certainty requires more than a guess, but
less than absolute exactness or mathematical precision.”
Precision Pine, 596 F.3d at 833; see Ark. Game & Fish
Comm’n v. United States, 736 F.3d 1364, 1379 (Fed. Cir.
2013) (“All that is required is such reasonable certainty
that damages may not be based wholly upon speculation.”
(internal quotation marks and citation omitted)). The
Court of Federal Claims did not admit the documents as
stipulations or judicial admissions, but only as “admissi-
ble evidence” that “could be weighed . . . against other
evidence adduced at trial,” and found that, based on all
evidence on record, the Stipulation and Parties’ State-
11 The parties do not dispute the amount of damages
calculated after 1998. See Appellant’s Br. 48, 50; Appel-
lees’ Br. 52 n.4.
20 SHELL OIL CO. v. UNITED STATES
ments supported its findings on damages with reasonable
certainty. Shell IV, 130 Fed. Cl. at 77 (citation omitted).
The Court of Federal Claims was free to admit the
Stipulation and Parties’ Statements into evidence. It
properly followed the Federal Rules of Evidence, see 28
U.S.C. § 2503(b) (2012) (“The proceedings of the Court of
Federal Claims shall be in accordance with . . . the Feder-
al Rules of Evidence.”), which allow parties to submit for
consideration relevant evidence, defined as that which
“has any tendency to make a fact more or less probable
than it would be without evidence,” Fed. R. Evid. 401
(Test for Relevant Evidence). Here, the evidence is ad-
missible as opposing party statements. See Fed. R. Evid.
801(d)(2)(A), (B) (stating that prior statements made by
an opposing party that were “in an individual or repre-
sentative capacity,” or are “one[s] the party manifested
that it adopted or believed to be true,” are admissible if
“offered against” said opposing party). The factfinder is
“free to weigh” any evidence properly allowed into the
record “against the other evidence” in making its factual
findings. Paice LLC v. Toyota Motor Corp., 504 F.3d
1293, 1312 (Fed. Cir. 2007); see id. (affirming lower court’s
consideration of unfavorable statements not made under
cross-examination as admissible evidence, rather than
considering them as judicial admissions). 12
12 Because the Court of Federal Claims did not con-
sider the Stipulation a binding admission in Shell IV, we
find unpersuasive the Government’s argument that the
Court of Federal Claims erred by not “explicitly ac-
cept[ing] those facts” through a motion pursuant to Rules
of the Court of Federal Claims (“RCFC”) Rule 56(e)(2) or
56(g). Appellant’s Br. 44; see id. at 42−49; see also RCFC
56(e)(2) (“If a party fails to properly support an assertion
of fact or fails to properly address another party’s asser-
tion of fact . . . the court may: . . . consider the fact undis-
SHELL OIL CO. v. UNITED STATES 21
We are unconvinced by the Government’s counterar-
gument that the Stipulation and Parties’ Statements were
made for purposes of settlement, such that consideration
of these statements contravenes Federal Rule of Evidence
408(a). Appellant’s Br. 42. That rule “excludes factual
admissions made in the course of settlement negotia-
tions.” Fed. R. Evid. 408(a)(2); see id. (“Evidence of the
following is not admissible . . . conduct or a statement
made during compromise negotiations about the
claim . . . .”). The documents relied upon by the Court of
Federal Claims give no indication they were made for
purposes of settlement. See, e.g., J.A. 1856 (stating, in the
Stipulation, that amounts will be paid only if the appeal
of underlying liability determination is unsuccessful),
1859 (responding, by the Government, to proposed find-
ings of fact for purposes of summary judgment), 1874
(same). Moreover, the Government agreed the Stipula-
tion provided an accurate description of total costs should
it be responsible for all remediation in the current litiga-
tion as late as 2013. 13 See Shell, 108 Fed. Cl. at 425; see
also J.A. 1886 (responding, by the Government in 2012, to
the Oil Companies’ proposed response costs by stating the
costs were “uncontroverted”). We do not find abuse of
discretion.
2. Allocation Amongst the Oil Companies
The Court of Federal Claims divided the assessed
damages among the four Oil Companies in the following
amounts: $58,292,868.56 to Shell Oil Company,
puted for purposes of the motion . . . .”); RCFC 56(g)
(stating procedure for the Court of Federal Claims to treat
a fact as established when it “does not grant all the relief
requested by the motion”).
13 Tellingly, the Government still has offered no re-
buttal calculation of its own for costs through 1998. See
generally Appellant’s Br.
22 SHELL OIL CO. v. UNITED STATES
$18,847,165.08 each to Union Oil Company of California
and Atlantic Richfield Company, and $3,522,648.60 to
Texaco, Inc. Shell IV, 130 Fed. Cl. at 42. The Govern-
ment disputes the quantum of damages by arguing that
damages costs were not properly allocated either “be-
tween costs stemming from different products,” Appel-
lant’s Br. 48, or between individual plaintiffs, id. at 50;
see id. at 50−51. We agree with the Court of Federal
Claims that requiring the Oil Companies to itemize costs
among different products, where the waste accumulated
over a period of years in the decades prior and the reme-
diation cost was not itself divided into solutions tailored
to treat each particular waste product, would require the
kind of “absolute exactness or mathematical precision”
that we have stated is not necessary to prove damages
with reasonable certainty. Shell IV, 130 Fed. Cl. at 41–
42; see Precision Pine, 596 F.3d at 833 (stating trial court
is free to consider evidence and modify proposed damages
calculations so long as it provides “well-reasoned explana-
tions”). As plaintiffs in the case, the Oil Companies were
required to show reasonable certainty with respect to
damages owed by the Government to the Oil Companies
collectively. They did. See supra Section I.C.1. They
further provided a breakdown of costs, see J.A. 1792, 1884
(showing cost and waste disposal breakdown by compa-
ny), 2129 (providing expert testimony confirming cost
breakdown), and the Government has not offered any
evidence to rebut or otherwise challenge this evidence, see
generally Appellant’s Br. 14
14 The Government also argues in a conclusory fash-
ion that the Anti-Assignment Act, 31 U.S.C. § 3727(2012), should bar recovery, see Appellant’s Br. 50. How-
ever, the Government has offered no argument in re-
sponse to the Court of Federal Claims’ determination that
the Anti-Assignment Act does not apply here because “the
SHELL OIL CO. v. UNITED STATES 23
The Government equates this case to Howard Indus-
tries, Inc. v. United States, in which our predecessor court
found a plaintiff had not shown damages with reasonable
certainty. See Appellant’s Br. 48−49 (citing 115 F. Supp.
481, 487 (Ct. Cl. 1953)). There, the court found a plaintiff
had not proven damages because the plaintiff “had to
indulge in a number of assumptions entirely unsupported
by any evidence and which . . . were susceptible of actual
proof,” and “the record contain[ed] no evidence from which
the court c[ould] even approximate the amount of plain-
tiff’s loss, if any.” Howard, 115 F. Supp. at 487 (emphasis
added). Here, on the contrary, the Oil Companies have
submitted evidence showing damages incurred, see
J.A. 1851−910, that has been unrebutted by any evidence
to the contrary, see generally Appellant’s Br., and this
evidence is sufficient, for the reasons stated above, to
prove reasonable certainty. Therefore, we conclude the
Court of Federal Claims did not err in its award of dam-
ages.
II. Challenge to the 2015 Order
A. Standards of Review
We review the Court of Federal Claims’ grant of
summary judgment de novo, see Dairyland Power Co-op.
v. United States, 16 F.3d 1197, 1201 (Fed. Cir. 1994), and
decisions on motions to amend for abuse of discretion, see
Balestra v. United States, 803 F.3d 1363, 1368 (Fed. Cir.
Oil Companies did not assign their rights to receive
reimbursement . . . to any third parties.” Shell IV, 130
Fed. Cl. at 42. Accordingly, we find this argument
waived. See United States v. Great Am. Ins. Co., 738 F.3d
1320, 1328 (Fed. Cir. 2013) (“It is well established that
arguments that are not appropriately developed in a
party’s briefing may be deemed waived.” (citation omit-
ted)).
24 SHELL OIL CO. v. UNITED STATES
2015). Summary judgment is appropriate “if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” RCFC 56(a). An abuse of discretion occurs when,
for example, “the record contains no evidence upon which
the [trial] court could have rationally based its decision.”
Hi-Shear Tech., 356 F.3d at 1377−78 (internal quotation
marks and citation omitted).
B. The Court of Federal Claims Properly Denied Discov-
ery of Insurance Settlements and Agreements
The Court of Federal Claims granted the Oil Compa-
nies’ Motion for Partial Summary Judgment denying
discovery or assertion of arguments related to insurance
policies and settlements, and denied the Government’s
alternative Motion for Leave to Amend its pleadings to
assert claims related to insurance settlements. See Shell
III, 123 Fed. Cl. at 719. The Court of Federal Claims
thoroughly analyzed all of the parties’ arguments and
concluded, inter alia, that discovery of insurance policies
and settlements a decade after the case was brought to
the court would contravene the requirement that affirma-
tive defenses be raised at the time of initial pleading. Id.
at 718. The Court of Federal Claims similarly rejected
the Government’s Motion for Leave to Amend for undue
delay and prejudice. Id. at 727. The Government argues
that the Court of Federal Claims erred in its rulings
related to the insurance policies. Appellant’s Br. 33−41.
We disagree with the Government. 15
15 Because we affirm the Court of Federal Claims’
use of its discretion to deny leave to amend, we need not
address its alternative holdings as to the scope of the
mandate and the statute of limitations to assert a special
plea in fraud pursuant to 28 U.S.C. § 2514, or the Gov-
ernment’s arguments related to these alternative hold-
SHELL OIL CO. v. UNITED STATES 25
First, the Court of Federal Claims did not err in clas-
sifying the Government’s arguments related to mitigation
of damages for possible insurance payments as an affirm-
ative defense. “[T]he failure to plead [an affirmative
defense] can result in waiver.” Hor v. Chu, 699 F.3d 1331,
1337−38 (Fed. Cir. 2012); see Caldera v. Northrop World-
wide Aircraft Servs., Inc., 192 F.3d 962, 970 (Fed. Cir.
1999) (adopting rule that affirmative defenses as recited
by Federal Rule of Civil Procedure 8(c), which is equiva-
lent to RCFC 8(c), “must be timely pled or general-
ly . . . deemed waived”). RCFC 8(c)(1) likewise provides a
non-exhaustive list of affirmative defenses that “must” be
asserted in response to a pleading. See RCFC 8(c)(1)
(providing that “[i]n responding to a pleading, a party
must affirmatively state any avoidance or affirmative
defense, including . . .”). Although mitigation by third
party payment is not explicitly listed in RCFC 8(c), gener-
ally, any defenses that “admit the allegations of the
complaint but suggest some other reason why there is no
right of recovery [or] concern allegations outside of the
plaintiff’s prima facie case that the defendant therefore
cannot raise by simple denial in the answer” are consid-
ered affirmative defenses. 5 Wright & Miller, Fed. Prac.
& Proc. § 1271; see Cornwall v. U.S. Constr. Mfg., Inc.,
800 F.2d 250, 252 (Fed. Cir. 1986) (“[A]ny matter that
does not controvert the opposing party’s prima facie case
is to be affirmatively pleaded . . . .”); see also Ultra-
Precision Mfg., Ltd. v. Ford Motor Co., 411 F.3d 1369,
1376 (Fed. Cir. 2005) (“The purpose of Rule 8(c) of the
ings. See Watts v. XL Sys., Inc., 232 F.3d 877, 879 n.1
(Fed. Cir. 2000) (declining to address alternative argu-
ments when affirming trial court judgment); Appellant’s
Br. 38−41; see also 28 U.S.C. § 2514 (forfeiting claims
against the United States “by any person who corruptly
practices . . . any fraud against the United States in the
proof . . . thereof”).
26 SHELL OIL CO. v. UNITED STATES
Federal Rules of Civil Procedure is to give the opposing
party notice of the affirmative defense and a chance to
respond.” (internal quotation marks and citation omit-
ted)).
The Government’s assertion of mitigated damages in-
curred by breach of contract due to third party payment is
an affirmative defense and hence waivable, as it admits
the allegations of the Complaint but suggests there is no
right to recovery based on payments falling outside of the
Avgas Contracts. See Appellant’s Br. 33 (discussing the
Government’s “proffer of evidence showing
that . . . companies sustained no damages in light of their
insurance recoveries”); see also 5 Wright & Miller, Fed.
Prac. & Proc. § 1271. 16 Indeed, the Government itself has
characterized arguments related to mitigation of damages
through third party payment as affirmative defenses
before the Court of Federal Claims. See, e.g., Kan. City
16 This conclusion is in accord with that reached by
our sister circuits. See In re ZAGG Inc. Shareholder
Derivative Action, 826 F.3d 1222, 1231 (10th Cir. 2016)
(“[W]e agree with the Third Circuit that in determining
whether an issue should be treated as an affirmative
defense . . . the critical question . . . is whether requiring
the defendant to plead the matter is necessary ‘to avoid
surprise and undue prejudice by providing the plaintiff
with notice and the opportunity to demonstrate why the
affirmative defense should not succeed.’” (quoting In re
Sterten, 546 F.3d 278, 285 (3d Cir. 2008)); Travellers Int’l,
A.G. v. Trans World Airlines, Inc., 41 F.3d 1570, 1580−81
(2d Cir. 1994) (finding argument related to mitigation of
damages waived when not properly asserted as affirma-
tive defense); 999 v. C.I.T. Corp., 776 F.2d 866, 870 n.2
(9th Cir. 1985) (noting that mitigation of damages is
properly considered as an affirmative defense subject to
waiver).
SHELL OIL CO. v. UNITED STATES 27
Power & Light Co. v. United States, 131 Fed. Cl. 161, 168
(2017) (discussing the Government’s affirmative defense
that “damages should be offset by monies plaintiff re-
ceived from another source”). Thus, as an affirmative
defense, the Government should have asserted any offset
related to insurance policies in its 2008 Answer. Because
it did not, the Government waived this defense.
Second, the Court of Federal Claims did not abuse its
discretion when it denied the Government’s attempt to
amend its pleadings in 2015. See Shell III, 123 Fed. Cl. at
721−27 (discussing Motion for Leave to Amend). Alt-
hough generally “[i]n the absence of any apparent or
declared reason―such as undue delay . . . [or] undue
prejudice to the opposing party . . . ―the leave [to amend]
sought should . . . be freely given,” Foman v. Davis, 371
U.S. 178, 182 (1962) (internal quotation marks omitted),
“amendments are not allowed where they result in undue
delay or prejudice,” Cencast Servs., L.P. v. United States,
729 F.3d 1352, 1363 (Fed. Cir. 2013).
As for undue delay, the Government does not contest
the Court of Federal Claims’ findings that the Govern-
ment “was aware of the fact of the existence of the Oil
Companies’ insurance policies and coverage litigation as
early as 1992 and certainly by 1997.” Shell III, 123 Fed.
Cl. at 719; see id. (citing the Government’s filings in the
Ninth Circuit); see also Appellant’s Br. 36. Instead, the
Government only contests the date at which it learned of
the actual settlements. See Appellant’s Br. 15−16, 35.
However, in a 1997 filing in the Ninth Circuit litigation,
the Government stipulated that “[e]ach of the Oil Com-
pan[ies] have [sic] sued their insurers, claiming
that . . . insurance policies . . . entitle each Oil Company
to be reimbursed for response costs at the McColl site.”
J.A. 1832. Therefore, the Court of Federal Claims did not
abuse its discretion because its factual finding was not
clearly erroneous.
28 SHELL OIL CO. v. UNITED STATES
As for unfair prejudice, nearly a decade had passed
since the Oil Companies filed their Complaint in the
Court of Federal Claims, see J.A. 81, and more than seven
decades had passed since the operative events that gave
rise to the insurance policies, see, e.g., Shell II, 751 F.3d
at 1285 (“In 1942 and 1943, the Government . . . entered
into the [A]vgas [C]ontracts with the Oil Companies.”).
We do not find an abuse of discretion in the Court of
Federal Claims’ discovery ruling here, where the Gov-
ernment had “ample opportunity to broaden the scope of
the litigation . . . but chose not do so” in a timely fashion.
Am. Airlines, Inc. v. United States, 551 F.3d 1294, 1306
(Fed. Cir. 2008); see Cencast, 729 F.3d at 1363 (affirming
denial of a motion for leave to amend only two years after
deadline for amendments had passed). Therefore, we hold
that the Court of Federal Claims did not err in determin-
ing that the Government waived all arguments related to
insurance settlement payments, and could not assert
them for the first time on remand from Shell II.
CONCLUSION
We have considered the Government’s remaining ar-
guments and find them unpersuasive. Accordingly, the
Orders of the U.S. Court of Federal Claims are
AFFIRMED