Canpro Investments, Ltd v. United States ( 2023 )

In the United States Court of Federal Claims
No. 16-268C
(Filed: February 8, 2023)
(Reissued Upon Reconsideration: May 4, 2023) 1
FOR PUBLICATION
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CANPRO INVESTMENTS, LTD., *
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Plaintiff, *
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v. *
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THE UNITED STATES, *
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Defendant. *
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Marcos Reilly, Hinshaw & Culbertson LLP, Chicago, IL, for Plaintiff.
Amanda L. Tantum, Senior Trial Counsel, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, D.C., for
Defendant, United States. With her on briefs were Brian M. Boynton, Acting
Assistant Attorney General, Martin F. Hockey, Jr., Acting Director, Claudia Burke,
Assistant Director, as well as Michael Converse, Assistant General Counsel, Office of
General Counsel, Real Property Division (LR), U.S. General Services Administration.
OPINION AND ORDER
Plaintiff CanPro Investments, Ltd. (“CanPro”) brings claims arising from a
lease with the General Services Administration (“GSA”). See generally Compl. (ECF
1); Am. Compl. (ECF 156). Three motions, all submitted by Defendant, are currently
before the Court. The first is a portion of Defendant’s second motion to dismiss the
original complaint.2 Briefing on that issue was stayed, as discussed below, pending
resolution of CanPro’s second certified claim under the Contract Disputes Act
(“CDA”). See Order (ECF 109). The next motion, also responding to the initial
1 Plaintiff moved for clarification or reconsideration after this Opinion originally issued. See Pl.’s Mot.
for Clarification or, Alternatively, Reconsideration (“Mot. for Clarification”) (ECF 181); Def.’s Resp.
(ECF 184); Pl.’s Reply (ECF 185). Despite the motion’s somewhat intemperate language, the motion is
GRANTED IN PART. The original Opinion (ECF 180) is WITHDRAWN and the present Opinion —
with certain corrections and amplifications — is substituted. But the Opinion’s conclusions are
ultimately unchanged, so the motion is otherwise DENIED.
2 Def.’s Mot. to Dismiss (“Def.’s Mot. No. 2”) (ECF 87).
complaint, is a motion to dismiss, or alternatively, a motion for summary judgment.3
The last motion — responding to an amended complaint that Plaintiff filed after the
second certified claim was denied — is a motion to strike, or alternatively, a motion
to dismiss.4 The portion of Defendant’s Motion No. 2 currently pending before this
Court (§ II.B) has been overtaken by subsequent procedural developments and is
therefore DENIED AS MOOT. As for the remaining two motions, Defendant’s
Motion No. 3 is GRANTED IN PART and DENIED IN PART; Defendant’s Motion
No. 4 is GRANTED IN PART as to jurisdiction arising from Plaintiff’s second CDA
claim and to the extent its arguments overlap with Motion No. 3, and otherwise
DENIED.
BACKGROUND
CanPro manages commercial rental properties in Florida. In 2012, CanPro and
GSA executed Lease No. GS-04B-62453 for space on the fourth floor of One Park
Place, a multistory commercial building in Boca Raton. Pl.’s Ex. A (ECF 156-1) at 2.5
The space was to be used for the South Palm Beach field office of the Social Security
Administration (“SSA”). Id. at 1. The lease incorporated a clause waiving CanPro’s
right to make a claim against its tenant for any damages relating to the government’s
“normal and customary use of the leased premises during the term of the lease.” Id.
at 39 § 5.13 (emphasis added).
When a nearby SSA field office closed in August 2014, visitor traffic at the SSA
office at One Park Place increased dramatically. See generally Def.’s App’x (“Def.’s
App’x No. 3”) (ECF 129-1 and 129-2) at 146–47.6 In its first certified CDA claim,
CanPro informed the GSA that “[v]isitors to SSA’s offices regularly exceed[ed] 400 to
500 persons per day,” even though “it was understood by all parties that SSA’s
intended volume of visitors would … not exceed 250 visitors per day.” Def.’s App’x No.
2 at 4 ¶¶ 4–5; see generally 41 U.S.C. § 7103(a)–(b). CanPro alleged that the result
was “overcrowding … creating noise, distractions, and disruption to One Park Place’s
other tenants[.]” Def.’s App’x No. 2 at 5 ¶ 7. CanPro also claimed that SSA’s visitors
3 Def.’s Mot. to Dismiss, or, Alternatively, Mot. for Summ. J. (“Def.’s Mot. No. 3”) (ECF 129); Pl.’s
Am./Corr. Resp. (“Pl.’s Resp. No. 3”) (ECF 150); Def.’s Reply (“Def.’s Reply No. 3”) (ECF 146), as
amended (ECF 152).
4 Def.’s Mot. to Strike, or, Alternatively, Mot. to Dismiss Pl.’s Am. Compl. (“Def.’s Mot. No. 4”) (ECF
165); Pl.’s Resp. (“Pl.’s Resp. No. 4”) (ECF 168); Def.’s Reply (“Def.’s Reply No. 4”) (ECF 173).
Defendant’s Motion No. 4 also includes a request for consideration of its previous motion.
5 Plaintiff’s evidence is contained primarily in four exhibits (Exhibits A–D), each separately attached
to its amended complaint (ECF 156). Since CanPro’s exhibits are not paginated, this Opinion relies on
the electronic filing system’s pagination.
6 Defendant’s evidence is contained in three sets of appendices attached to its respective motions.
Defendant’s Motion No. 2 was accompanied by Appendix No. 2 (ECF 87-1), Motion No. 3 by Appendix
No. 3, and Motion No. 4 by Appendix No. 4 (ECF 165-1).
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engaged in behavior inappropriate for its commercial space. Id. at 6 ¶ 12. Plaintiff
alleged $250,000 in breach of contract damages. Id. at 8 ¶ 23.
The GSA contracting officer denied Plaintiff’s claim in 2015, see Compl. at 2
¶ 6; Pl.’s Ex. B at 1–3, leading CanPro to file suit in this Court seeking damages and
termination of the lease. The government moved to dismiss, and the Court dismissed
all of CanPro’s claims except for alleged breach of the duty of good faith and fair
dealing. See Def.’s Mot. to Dismiss (“Def.’s Mot. No. 1”) (ECF 8); Order & Opinion
(ECF 20) at 25. The Court interpreted the provision of the lease referencing “normal
and customary use” to mean that the SSA was, in fact, “obligated to limit the daily
visitor volume to its office,” which the Complaint alleged the SSA failed to do. Id.Among other issues the Court addressed, the Court dismissed CanPro’s claim for
breach of contract based on “superior knowledge” for lack of jurisdiction because it
had not been presented to the contracting officer. See Order & Opinion at 9–10.
Following the Court’s decision, CanPro submitted its initial disclosures. After
a series of amendments, its seventh and final amended initial disclosures asserted a
range of approximately $36–$42 million in damages. See Def.’s App’x No. 2 at 97. The
bulk of this figure was based on loss of tenants (approximately $16 million) and loss
of property value ($20–$25 million). Id. at 96–97. CanPro also asserted “Other Lost
Profits” valued at “TBD.” Id. at 97.
Defendant then filed another motion to dismiss. See generally Def.’s Mot. No.
2. Most relevant now, the government argued in § II.B that CanPro failed to present
its claims regarding loss of tenants and declines in property value to the contracting
officer as the CDA requires. See id. at 12–18.
While that motion was pending, CanPro submitted a second claim to the
contracting officer covering those economic losses and the previously dismissed
superior knowledge claim. Pl.’s Ex. D at 6–7. This Court stayed resolution of § II.B
pending the contracting officer’s decision. See Order (ECF 92) at 1–2; see also Opinion
& Order (ECF 122) at 11. CanPro’s second CDA claim has since been denied by the
contracting officer as well. See Def.’s App’x No. 4 at 6.
That brings us to the remaining filings at issue today. The government once
again moved to dismiss CanPro’s claim for breach of the duty of good faith and fair
dealing, or, in the alternative, for summary judgment. See generally Def.’s Mot. No.
3. While that motion was pending, CanPro filed an amended complaint — without
moving for the Court’s leave or confirming the government’s consent — that added
certain new factual allegations, introduced the economic losses presented in its
second claim to the contracting officer, and repleaded the previously dismissed claim
for superior knowledge. See generally Am. Compl. The government responded with
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another motion to strike the amended complaint or, in the alternative, to dismiss the
issues it presented, including the economic loss and superior knowledge claims. Def.’s
Mot. No. 4.
DISCUSSION
I. Failure to Obtain Leave to File Amended Complaint
As mentioned, CanPro filed its amended complaint without seeking the Court’s
leave or obtaining the government’s consent. The government argues that was
improper under RCFC 15(a), and that the amended complaint should therefore be
stricken. Def.’s Mot. No. 4 at 8–9. I conclude that it is unnecessary to strike the
amended complaint.
The time for CanPro to amend its complaint as of right had expired by the time
the amended complaint was filed. See RCFC 15(a)(1). The Rules permitted CanPro to
“amend its pleading only with the opposing party’s written consent or the court’s
leave,” but provided that the Court “should freely give leave when justice so requires.”
RCFC 15(a)(2).
The factors that typically justify denying leave to amend — e.g., “undue delay,
bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, futility of amendment, etc.,” see Dixon
v. United States, 158 Fed. Cl. 80, 84 (2022) (quoting Foman v. Davis, 371 U.S. 178,
182 (1962)) — are not present here. Rather, the lack of advance leave or consent
appears to have resulted from misunderstandings or miscommunications. See Pl.’s
Resp. No. 4 at 2–3. Under the circumstances, the fairest and most efficient resolution
is to accept the amended complaint and address the government’s dismissal and
summary judgment arguments on the merits to the extent they are applicable to the
amended complaint. See Big Oak Farms, Inc. v. United States, 105 Fed. Cl. 48, 50 n.1
(2012) (citing Wright & Miller, 6 Fed. Prac. & Proc. Civ. 1476 (3d ed.)). The
government agrees that approach is satisfactory. Tr. of Oral Arg. (“Tr.”) (ECF 179) at
67.
I therefore accept Plaintiff’s amended complaint as the operative pleading.
Defendant’s Motion No. 4 is denied insofar as it requests that the amended complaint
be stricken.
II. Partial Dismissal for Lack of Jurisdiction
The government moves to dismiss all or part of the case for lack of jurisdiction
under RCFC 12(b)(1). First, the government challenges CanPro’s standing, arguing
that CanPro’s alleged harms result from the independent acts of third parties. Def.’s
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Mot. No. 3 at 23–29. Second, the government moves to dismiss CanPro’s requests for
economic damages — the losses covered in CanPro’s second CDA claim — because
CanPro did not adequately present them to the contracting officer. Def.’s Mot. No. 4
at 13–19. I agree with the latter argument, but not entirely with the former.
A. Standing
“Standing is a threshold jurisdictional issue.” Myers Investigative & Security
Servs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002). “[S]tanding is not
dispensed in gross; rather, plaintiffs must demonstrate standing for each claim that
they press and for each form of relief that they seek[.]” TransUnion LLC v. Ramirez,
141 S. Ct. 2190, 2208 (2021) (citing Davis v. Federal Election Comm’n, 554 U.S. 724,
734 (2008); Friends of Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528
U.S. 167, 185 (2000)); see also DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352
(2006). A plaintiff “bears the burden of establishing subject matter jurisdiction by a
preponderance of the evidence.” Reynolds v. Army & Air Force Exch. Serv., 846 F.2d
746, 748 (Fed. Cir. 1988).7
There are three elements of standing: “a plaintiff must show [1] that it suffered
an injury in fact that is [2] causally connected to the conduct complained of and [3]
redressable by court action.” See Callaway Manor Apartments, Ltd. v. United States,
940 F.3d 650, 657 (Fed. Cir. 2019) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–
61 (1992)).8 The government contends that the second of those elements — a causal
connection between the defendant’s alleged conduct and plaintiff’s injury — is
missing because CanPro’s damages were caused by the SSA’s visitors, third parties
whose acts cannot be attributed to the government. See Def.’s Mot. No. 3 at 23–29. It
characterizes visitors as “third parties” who made “independent choices” about
whether to visit the SSA office at One Park Place. Id. at 2, 29.
The government is correct that “standing is substantially more difficult to
establish when it depends on the unfettered choices made by independent actors not
before the courts and whose exercise of broad and legitimate discretion the courts
cannot presume either to control or to predict.” Cierco v. Mnuchin, 857 F.3d 407, 418
(D.C. Cir. 2017) (quoting Lujan, 504 U.S. at 562 (internal quotes omitted)). However,
7 A plaintiff is initially entitled to the presumption that “all of the factual allegations … [are] true and
correct.” Morris v. United States, 33 Fed. Cl. 733, 741–42 (1995). But a plaintiff loses the benefit of this
presumption if the defendant “mounts a factual challenge to the facts upon which jurisdiction is
premised[.]” Id. at 742. The Court may then look outside the complaint to resolve factual questions
related to jurisdiction. Id.8 This Court, “though an Article I court, … applies the same standing requirements enforced by other
federal courts created under Article III.” Anderson v. United States, 344 F.3d 1343, 1350 n.1 (Fed. Cir.
2003); see also Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009); Emerald
Intern. Corp. v. United States, 54 Fed. Cl. 674, 677 (2002).
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“[s]tanding may exist where … some third party action is the result of the
‘determinative or coercive effect’ of a government action directed at the third party.”
Emerald, 54 Fed. Cl. at 680–83 (quoting Bennett v. Spear, 520 U.S. 154, 169 (1997)).
So were the SSA’s visitors true third parties, or were their allegedly harmful acts
somehow determined by the government?
The government’s argument has merit up to a point. It is straightforward —
and CanPro concedes — that damages caused by individual visitors’ behavior cannot
be attributed to the government. Tr. at 22; Cierco, 857 F.3d at 418. Whatever the
reasons that individuals might come to a SSA office, there is no basis in the record to
think that the government determines how the people act when they are there. That
means there is no “fairly traceable” connection between alleged injuries caused by
visitor misconduct and any action on the government’s part. Cierco, 857 F.3d at 415(quoting Lujan, 504 U.S. at 555). CanPro therefore lacks standing to pursue the
government over those injuries, and any claims based on those types of harms must
be dismissed for lack of jurisdiction.9
But some of CanPro’s claims rest on the sheer volume of SSA’s visitors, not
their behavior. As to those claims, the analysis is different for two reasons.
First, this Court has twice held that the lease’s reference to “normal and
customary” use, in conjunction with other provisions, places an upper limit on
anticipated attendance at the SSA office. See Order & Opinion at 13, 23–25; Opinion
& Order on Motion for Reconsideration (ECF 32) at 6 (“In sum, the existence of a
provision addressing the ‘normal and customary use’ of the premises (whatever it
may be), the incorporation of building specifications into the lease, and basic common
sense — or any of these, standing alone — indicate that defendant cannot plausibly
argue that the parties reasonably expected an unlimited number of daily visitors to
the SSA office at One Park Place.”). Those legal conclusions are now law of the case,
and should not be “reopen[ed] or reconsider[ed]” except under “extraordinary
circumstances.” Haddock v. United States, 161 Fed. Cl. 6, 21 (2022) (quoting
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)); see also Hunt
9 As mentioned above, the Supreme Court requires plaintiffs to “demonstrate standing for each claim
that they press and for each form of relief that they seek (for example, injunctive relief and damages).”
TransUnion, 141 S. Ct. at 2208 (emphasis added); see also Davis, 554 U.S. at 734; Friends of Earth,
528 U.S. at 185; City of Los Angeles v. Lyons, 461 U.S. 95, 109 (1983). But the Supreme Court has also
explained that causation of injuries by third-party acts goes to standing too. Bennett, 520 U.S. at 169;
Lujan, 504 U.S. at 560–62. That implies that particular items of requested damages can be rejected
for lack of standing even if they are part of a claim, and constitute a form of relief, that the plaintiff
otherwise has standing to pursue. In other circumstances, failure to attribute injury to a defendant
requires dismissal on the merits. See infra II.A.
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Const. Grp., Inc. v. United States, 281 F.3d 1369, 1372 (Fed. Cir. 2002) (explaining
that contract interpretation is a question of law). The government provides no good
basis to reverse course.
Second, the government had the power to compel attendance at the SSA office,
and in fact did so. Although the SSA cannot turn people away, Def.’s Mot. No. 3 at 5
¶ 9, the government concedes that in certain circumstances, in-person attendance at
SSA offices is required. Id. at 6 ¶ 17. The government’s in-person attendance
requirement therefore presumably had a “determinative or coercive effect” on at least
some third parties’ decisions to visit the SSA office. Bennett, 520 U.S. at 169.
The record thus shows that the lease placed an upper limit on attendance at
the SSA office, and that the government required some people to attend in person.
Because the government compelled visitor attendance that allegedly contributed to
violations of the lease’s limits, the government cannot disclaim, as a matter of law,
damages from excess attendance (if any) as involving purely independent acts of third
parties. CanPro therefore has standing to seek damages for those claims.10
B. Contract Disputes Act presentment
The government also argues that CanPro’s claims for economic damages
should be dismissed because CanPro failed to present them to the contracting officer
with sufficient specificity. Def.’s Mot. No. 4 at 13–19. The government is correct, and
so the inadequately presented claims must be dismissed for lack of jurisdiction.
When the CDA applies, presentment of claims to the contracting officer is a
jurisdictional prerequisite to suits against the government in this Court. James M.
Ellett Constr. Co. v. United States, 93 F.3d 1537, 1541–42 (Fed. Cir. 1996); W.M.
Schlosser Co. v. United States, 705 F.2d 1336, 1338–39 (Fed. Cir. 1983); see also 41
U.S.C. §§ 7103(a), 7104(b). To meet the presentment requirements of the Federal
Acquisition Regulations (“FAR”), a claim to a contracting officer must be “a written
demand or written assertion by one of the contracting parties seeking, as a matter of
right, the payment of money in a sum certain, the adjustment or interpretation of
contract terms, or other relief arising under or relating to this contract.” FAR 52.233-
1(c) (codified at 48 C.F.R.) (emphasis added); see also Creative Mgmt. Servs., LLC v.
United States, 989 F.3d 955, 962 (Fed. Cir. 2021) (“[A] CDA claim … must state a
‘sum certain.’”). “The law does not require that a CDA claim identify a precise
monetary amount to state a ‘sum certain.’” Creative Mgmt., 989 F.3d at 962. It is
10I reserve decision on whether particular items of alleged damage were caused by visitor numbers or
visitor conduct, as well as questions regarding the limit on attendance contemplated by the lease, the
actual number of attendees, the existence and quantum of damages caused by any excess visitor traffic,
and related issues.
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enough when “the contracting officer can determine the amount claimed by a simple
mathematical calculation.” Id. (quoting Modeer v. United States, 68 Fed. Cl. 131, 137
(2005)). But the claim must provide “a clear and unequivocal statement that gives
the contracting officer adequate notice of the basis and amount of the claim.” Contract
Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). The
claim must also include “supporting documents that would … allow[] the contracting
officer to substantiate the claim.” JEM Transport, Inc. v. United States, 120 Fed. Cl.
189, 198 (2015) (citing J.P. Donovan Constr., Inc. v. Mabus, 469 F. App’x 903, 908
(Fed. Cir. 2012)); see also Creative Mgmt., 989 F.3d at 963.
CanPro’s second CDA claim referenced “millions of dollars in damages” caused
by, inter alia, “excess volume of occupants,” “loss of reputation[,] and loss of revenue.”
Pl.’s Ex. D at 6–8. Those categories of alleged damage were all new; they were not
part of the original CDA claim. CanPro attached and incorporated by reference a copy
of its Seventh Amended Initial Disclosures, id. at 8, which asserts damages in a range
of $36,332,000 to $41,332,000 for loss of tenants, loss of property value, and other lost
profits, id. at 336. None of those categories of damages satisfies CDA presentment
requirements.
To begin with, the record does not reflect that any of them were supported by
documentation of any kind.11 CanPro did not provide any evidence that it had lost
profits or property value at all, much less material sufficient for “mathematical
calculation” of a particular amount. Creative Mgmt., 989 F.3d at 962. In addition, the
latter two categories of damages in CanPro’s second CDA claim were not presented
as a “sum certain.” FAR 52.233-1(c). CanPro requested a specific (albeit
unsubstantiated) sum for loss of tenants: $16,332,000. See Pl.’s Ex. D at 335. But as
to lost property value and other lost profits, CanPro avoided committing to a
particular figure. It presented the first as a $5 million range. See id. at 336 (asserting
$20–$25 million in “Loss of Property Value”). CanPro stated its lost profits were
11CanPro relies on H.L. Smith, Inc. v. Dalton, which holds that a contractor need not “submit invoices,
detailed cost breakdowns, or other cost-related documentation to make a valid CDA claim.” 49 F.3d
1563, 1564 (Fed. Cir. 1995); id. at 1565 (“The contractor may supply adequate notice of the basis and
amount of the claim without accounting for each cost component.”). See Mot. for Clarification at 8. The
fact that a CDA claim must “include supporting documents that would allow the contracting officer to
substantiate the claim,” Creative Mgmt., 989 F.3d at 963 (quoting J.P. Donovan Constr., 469 F. App’x
at 908), but need not submit “detailed” documentation, see H.L. Smith, Inc., 49 F.3d at 1564, might
lead to close jurisdictional questions in some circumstances. But because CanPro presented no support
for its CDA claim, this case is easy. The relevant claims must be dismissed not because CanPro
provided insufficiently detailed documentation, but because CanPro failed to substantiate them at all.
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“TBD,” with no dollar value at all. Id. (referring to “[o]ther Lost Profits (i.e., other lost
revenues, incremental operating expenses, etc.)”).12
In its claim to the contracting officer, CanPro purported to “reserve[] the right
to amend [its] claim for damages as the litigation progresses.” See id. at 8. CanPro
relied especially on the future opinions of litigation experts. See id. at 336. CanPro
still has not disclosed its experts’ opinions and calculations.13 But CanPro nonetheless
continues to argue that it needs additional time for discovery because its damages
will be proven by testimony from experts and possibly additional building tenants.
Tr. at 8, 37. There are several problems with that approach.
Rule 56(d) allows this Court to defer or deny a motion for summary judgment
(or take other appropriate action) when the nonmovant “cannot present facts
essential to justify its opposition[.]” RCFC 56(d). But the nonmovant in such
circumstances must bring an “affidavit or declaration” containing “specified reasons”
why the facts are unavailable. Id.; see also Clear Creek Cmty. Servs. Dist. v. United
States, 100 Fed. Cl. 78, 82–83 (2011); Padilla v. United States, 58 Fed. Cl. 585, 593
(2003); Theisen Vending Co. v. United States, 58 Fed. Cl. 194, 198 (2003). CanPro
cannot simply avoid summary judgment with lawyer argument for additional
discovery. In any event, CanPro has already had ample opportunity to conduct
extensive discovery, including RCFC 30(b)(6) depositions, see e.g., Pl.’s Ex. D at 197,
317, 323, and CanPro gives no reason why it has not yet obtained the discovery it
thinks necessary.14
More fundamentally, CanPro’s request for additional discovery to make up for
shortcomings in its CDA claim is exactly backwards. The point of the CDA
presentment requirement is not for government contractors to check a box before
12 A CDA claim can present a sum certain without stating “a precise monetary amount,” or despite
using “qualifying terms like “approximately,’” when the amount of the claim can be ascertained by
some other means — for example, by a mathematical calculation or by reference to the balance of a
particular account. Creative Mgmt., 989 F.3d at 962–63; see Mot. for Clarification at 10. None of that
permits CanPro’s reliance on ranges and placeholders.
13 My original opinion stated that CanPro had not “identified” its experts. In fact CanPro had done so.
See CanPro Expert Disclosures (ECF 95). The error has been corrected, but it has no bearing on the
outcome. CanPro argues that it “was not required to produce expert opinion or analysis regarding
computation of damages at the time of the presentment of the second claim to the contracting officer,
because supporting documentation is not a jurisdictional perquisite [sic].” See Mot. for Clarification at
8. But substantiation of a CDA claim is a jurisdictional requirement, see Creative Mgmt., 989 F.3d at
963, so if CanPro needs its experts’ opinions for substantiation, they must be provided at the time of
the CDA claim.
14 CanPro notes that discovery has been stayed. See Mot. for Clarification at 11–12. That does not
excuse CanPro from its obligation to detail what discovery it still needs. As to the experts CanPro
supposedly needed to support its damages figures, moreover, the stay is irrelevant: A discovery stay
could hardly have prevented CanPro from working with its own experts.
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expert discovery; it is to give the contracting officer notice and the opportunity to pay
a “sum certain.” FAR 52.233-1(c). If the contractor does not follow that requirement,
there is no jurisdiction in this Court in the first place; ergo no litigation, and no expert
discovery for the parties to look forward to. See Creative Mgmt., 989 F.3d at 962. If a
party — like CanPro — depends on expert analysis to compute its damages, it
therefore cannot wait for expert discovery; it must produce the necessary analysis at
the time of presentment to the contracting officer. Because CanPro tried to save for
litigation something that it should have presented to the contracting officer, there is
nothing for this Court to do but dismiss the defective aspects of CanPro’s case. Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (“Without jurisdiction the
court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and
when it ceases to exist, the only function remaining to the court is that of announcing
the fact and dismissing the cause.”) (quoting Ex parte McCardle, 74 U.S. (7 Wall.)
506, 514 (1868)).
III. Dismissal of Certain Claims and Items of Damages
The government also argues that it is entitled to summary judgment as to some
— though not all — of the items of damage CanPro alleges.15 To win a claim for breach
of contract, “a party must allege and establish: (1) a valid contract between the
parties, (2) an obligation or duty arising out of the contract, (3) a breach of that duty,
and (4) damages caused by the breach.” San Carlos Irrigation & Drainage Dist. v.
United States, 877 F.2d 957, 959 (Fed. Cir. 1989); see also Chevron U.S.A. Inc. v.
United States, 160 Fed. Cl. 583 (2022). The government can obtain summary
judgment dismissing a claim if there is no genuine issue of material fact on each of
those elements and the government is entitled to judgment as a matter of law. RCFC
56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). I agree that certain
claims should be dismissed.
15A party seeking summary judgment must show “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). “[A]ll evidence must be
viewed in the light most favorable to the nonmoving party, and all reasonable factual inferences should
be drawn in favor of the nonmoving party.” Dairyland Power Coop. v. United States, 16 F.3d 1197,
1202 (Fed. Cir. 1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), and Adickes v.
S.H. Kress & Co., 398 U.S. 144, 158–59 (1970)). After the moving party satisfies its initial burden of
production, the burden of production shifts to the nonmoving party to put forth proof that there is a
genuine dispute as to a material fact. RCFC 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
To survive the government’s motion for summary judgment, CanPro “must do more than simply show
that there is some metaphysical doubt as to the material facts.” Matsushita Electric Indust. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Summary judgment should be granted “against a
party who fails to make a showing sufficient to establish the existence of an element essential to that
party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.
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There is no dispute that the lease was a contract between the parties; in
addition, as mentioned above, whether the government breached any duty to limit
SSA office attendance depends on contested factual questions that cannot be resolved
at summary judgment. Supra note 10; see also, e.g., H.N. Wood Products, Inc. v.
United States, 59 Fed. Cl. 479, 489 (2003). The government mainly argues instead
that CanPro cannot establish that its alleged damages were caused by excess
attendance. Def.’s Mot. No. 3 at 39.
To prove causation of given items of damages, CanPro must show (1) the
damages were reasonably foreseeable at the time of contracting, (2) the damages were
caused by the breach, and (3) the damages estimates are reasonably certain. Chevron,
160 Fed. Cl. at 590; cf. Shell Oil Co. v. United States, 130 Fed. Cl. 8, 34–36 (2017),
aff’d, 896 F.3d 1299 (Fed. Cir. 2018). The “plaintiff must show that but for the breach,
the damages alleged would not have been suffered.” 16 San Carlos Irrigation &
Drainage Dist. v. United States, 111 F.3d 1557, 1563 (Fed. Cir. 1997); see also Yankee
Atomic Elec. Co. v. United States, 536 F.3d 1268, 1272 (Fed. Cir. 2008). The
government prevails at summary judgment if there is no genuine dispute that
CanPro will be unable as a matter of law to prove those elements.
A. Claims as to certain items of damages may be dismissed
CanPro has conceded that it lacks evidence demonstrating that certain items
of alleged damages were caused by excess visitor volume. CanPro has not made the
showing necessary for additional discovery as to causation of any of those items. See
RCFC 56(d). Because CanPro “fail[ed] to make a showing sufficient to establish the
existence of an [essential] element,” namely causation, the Court grants the
government’s motion for summary judgment as to the following items of damages:
work on the SSA employee entrance, construction of a new crosswalk, and installation
of new handrails. Celotex, 477 U.S. at 322.
16 The Federal Circuit has affirmed two tests for assessing if damages were caused by a breach: the
“but-for” test and the “substantial causal factor” test. Citizens Federal Bank v. United States, 474 F.3d
1314, 1318 (Fed. Cir. 2007); see also Shell, 130 Fed. Cl. at 35–36. The selection of the appropriate
standard “depends on the facts of the particular case and lies largely within the trial court’s discretion.”
Citizens Federal Bank, 474 F.3d at 1318. The but-for test is preferable in most circumstances. Yankee
Atomic Elec. Co. v. United States, 536 F.3d 1268, 1272–73 (Fed. Cir. 2008). The substantial-factor test
may be useful “when Defendant asserts multiple causes for claimed damages.” Northeast Savings FA
v. United States, 91 Fed. Cl. 264, 327 (2010) (citing Energy Capital v. United States, 47 Fed. Cl. 382,
395 (2000), aff’d in part and rev’d in part on other grounds, 474 F.3d 1314, 1319 (Fed. Cir. 2007)); see
also Am. Sav. Bank, F.A. v. United States, 98 Fed. Cl. 291, 301 (2011); Citizens Federal Bank, FSB v.
United States, 59 Fed. Cl. 507 (2004).
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1. Special employee entrance
CanPro alleges that it spent $6,683.48 on “special requirements for [a] SSA
employee entrance.” Pl.’s Ex. D at 334. The government argues that CanPro cannot
show that expense resulted from the allegedly excessive number of visitors because
visitors were not permitted to use the employee entrance. Def.’s Mot. No. 3 at 32.
The record contains an affidavit from the Assistant District Manager of the
SSA office at One Park Place, Pamela Jannuzzi, stating that the door was designated
exclusively for SSA employees, vendors, and maintenance personnel. See Def.’s App’x
No. 3 at 149–50 ¶¶ 11, 12. Ms. Jannuzzi stated that the door was repaired because it
failed to securely close, which permitted any person in the common area to access the
office and thereby created a security risk. Id. Nothing in the record connects that risk
to the number of visitors to the SSA office. At most, CanPro argued that the “sheer
overflow” led CanPro to repair the employee entrance, but it could not point to any
evidence in the record to show that nonemployees were using the employee entrance.
Tr. at 25.
As such, there is no genuine issue of fact as to whether the increased number
of visitors resulting from the alleged breach was the but-for cause of CanPro’s decision
to spend money on changes to the SSA employee entrance. See San Carlos, 111 F.3d
at 1563; Yankee, 536 F.3d at 1272. Because CanPro has no evidence on causation as
to that portion of its case, summary judgment for the government is appropriate.
Celotex, 477 U.S. at 322–23.
2. Crosswalk
CanPro alleges that it spent $15,397 constructing a crosswalk with speed
bumps. Pl.’s Ex. D at 334. The government argues that the installation of the
crosswalk had nothing to do with visitor volume. Def.’s Mot. No. 3 at 31.
CanPro does not point to any causal relationship between the number of
visitors and the installation of the crosswalk. In fact, CanPro admits the opposite:
Ofer Drucker, CanPro’s Vice President of Finance, conceded that even without a
breach of the lease resulting in an increased number of visitors, CanPro would have
installed the crosswalk. Def.’s App’x No. 3 at 37–38 (“Even if I had only one guy with
a walker crossing the road, I didn’t want them to danger their life. That’s why we put
it there. Wasn’t related to the numbers.”). Thus, no genuine issue of fact exists as to
causation, and the government is entitled to summary judgment. See Celotex, 477
U.S. at 322–23; San Carlos, 111 F.3d at 1563; Yankee, 536 F.3d at 1272.
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3. Courtyard handrails
CanPro asserts that it spent $875 installing special handrails in the courtyard.
Pl.’s Ex. D at 334. As observed by the government, CanPro’s only documentation
appears to be an invoice for $400 from 2013, well before the office closure that led to
increased visitor traffic at the SSA office at One Park Place. Def.’s App’x No. 3 at 145.
CanPro does not identify any causal relationship between the number of visitors and
the earlier installation of courtyard handrails. Thus, no genuine issue of fact exists
as to causation, and the government is entitled to summary judgment. See Celotex,
477 U.S. at 322–23; San Carlos, 111 F.3d at 1563; Yankee, 536 F.3d at 1272.
B. Claims as to other items of damages cannot be dismissed
The government does not move for summary judgment as to each item of
damages CanPro identifies, e.g., CanPro’s alleged $6,745.12 for security equipment
and cameras, or the $7,767 for digital keypads. Def.’s App’x No. 3 at 18; Tr. at 57.
There are also some items where the government has not shown the absence of any
genuine issues of fact, and therefore is not entitled to judgment as a matter of law.
The government has not met its burden as to the following items of damages: security
guards, air quality testing, and building maintenance.
1. Security guards
CanPro alleges that it spent $181,919.76 on additional security guards. Pl.’s
Ex. D at 334. The government provided a security guard of its own. But Mr. Drucker
testified that because the government’s security guards did not act in ways
appropriate for the commercial setting, he had to “send [the guards] back after and
hire my own people and train them … for the concierge just to control the crowd
coming to see the Social Security.” Def.’s App’x No. 3 at 25. By the end of 2014, first-
floor security was conducted exclusively by CanPro. Def.’s App’x No. 3 at 149 ¶ 8.
The government argues that because CanPro chose to hire its own security
guards rather than accept government-provided guards, the costs were not connected
to the excessive number of visitors. Def.’s Mot. No. 3 at 34. But that involves factual
questions going to causation: Given that the government had already hired guards,
was CanPro’s decision caused by the volume of visitors, or was it an independent
decision?17 The evidence that the government’s security measures were insufficient
to manage visitor traffic from CanPro’s perspective shows that there is a genuine
17As mentioned above, although this Court and the Federal Circuit usually consider causation under
a but-for test, they sometimes apply a substantial-factor test when there is a dispute about what factor
caused given damages. Northeast Savings, 91 Fed. Cl. at 327.
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dispute on the question, precluding summary judgment on this item of damages.
Def.’s App’x No. 3 at 25.
2. Air quality
CanPro alleges that it spent $850 on testing air quality for the SSA office in
response to a complaint following replacement of carpet in the SSA office suite. Pl.’s
Ex. D at 334. The government argues that CanPro cannot show a causal connection
between the excessive number of visitors and the air quality testing. Def.’s Mot. No.
3 at 31. But that is not enough to shift the burden of production onto CanPro. See
Celotex, 477 U.S. at 322; Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202
(Fed. Cir. 1994). Perhaps the air-quality complaint resulted from the government’s
alleged breach — for example, if the carpet replacement that led to the air quality
complaint resulted from excessive visitor traffic. The government has thus failed to
show that it is entitled to judgment as a matter of law.
3. Building maintenance
CanPro alleges approximately $55,000 spent on the replacement of carpet, new
wallcovering, and cleaning supplies as a result of excess visitor volume. Pl.’s Ex. D at
334. The government argues that CanPro cannot demonstrate that the damage to the
carpet and wallcovering could have resulted from an excessive number of visitors,
especially in areas other than the fourth floor where the SSA office is located. Def.’s
Mot. No. 3 at 32–33. Nonetheless, it remains at least plausible that foot traffic led to
wear and tear on interior surfaces.18 That leaves a genuine issue of material fact,
precluding summary judgment, on whether CanPro’s building maintenance costs
result from excess visitor traffic.
C. CanPro’s “superior knowledge” claim
The government moved to dismiss CanPro’s “superior knowledge” claim for
failure to state a claim. Def.’s Mot. No. 4 at 32–34. I conclude that the claim is well
pleaded and cannot be dismissed.
The superior-knowledge doctrine “imposes upon a contracting agency an
implied duty to disclose to a contractor otherwise unavailable information regarding
some novel matter affecting the contract that is vital to its performance.” Giesler v.
United States, 232 F.3d 864, 876 (Fed. Cir. 2000) (quoted in Scott Timber Co. v. United
States, 692 F.3d 1365, 1373 (Fed. Cir. 2012)). SSA’s plans to permanently close a
nearby SSA location might meet that standard. Id.18Although it is not evidence, CanPro claimed at argument that excess visitor traffic spread to different
parts of the building. Tr. at 8.
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The government argues that the superior-knowledge doctrine does not apply
because closures were not definitive facts at the time of contracting, see Def.’s Mot.
No. 4 at 33 (citing Hardwick Bros. Co., II v. United States, 36 Fed. Cl. 347, 393 (1996)),
and because the GSA cannot be imputed with knowledge of SSA offices, id. at 33–34.
But CanPro alleges that the GSA knew or should have known that SSA expected
closures of offices in the surrounding areas and that the GSA therefore knew or
should have known to expect that the number of visitors to the SSA office would
exceed 250 per day. Am. Compl. at 5. These factual allegations are sufficient to
demonstrate that the SSA’s plans could qualify as “otherwise unavailable information
regarding some novel matter affecting the contract that is vital to its performance.”
Giesler, 232 F.3d at 876. Thus, the complaint “contain[s] sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)); see also RCFC 8(a)(2). CanPro’s superior knowledge claim cannot be
immediately dismissed; it must be decided at summary judgment or trial.
CONCLUSION
Plaintiff’s Motion for Clarification is GRANTED IN PART. The Court’s
original Opinion is WITHDRAWN and the foregoing revised Opinion substituted.
The Motion for Clarification is otherwise DENIED.
The portion of Defendant’s Motion No. 2 currently pending before this Court
(§ II.B) is DENIED AS MOOT. Defendant’s Motion No. 3 is GRANTED IN PART
and DENIED IN PART. Defendant’s Motion No. 4 is GRANTED IN PART as to
jurisdiction arising from Plaintiff’s second CDA claim and to the extent its arguments
overlap with Motion No. 3, and otherwise DENIED. The parties are ORDERED to
confer and to submit a status report proposing additional proceedings no later than
June 5, 2023.
IT IS SO ORDERED.
s/ Stephen S. Schwartz
STEPHEN S. SCHWARTZ
Judge
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