Shell Oil Company v. United States

Case: 20-2221 Document: 40 Page: 1 Filed: 08/04/2021
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
______________________
2020-2221
______________________
Appeal from the United States Court of Federal Claims
in No. 1:19-cv-01795-CFL, Senior Judge Charles F. Lettow.
______________________
Decided: August 4, 2021
______________________
MICHAEL W. KIRK, Cooper & Kirk, PLLC, Washington,
DC, argued for plaintiffs-appellees. Also represented by
JOSE JOEL ALICEA, VINCENT J. COLATRIANO.
STEPHEN CARL TOSINI, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellant. Also repre-
sented by BRIAN M. BOYNTON, ROBERT EDWARD
KIRSCHMAN, JR., FRANKLIN E. WHITE, JR.
______________________
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2 SHELL OIL COMPANY v. US
Before NEWMAN, O’MALLEY, and TARANTO, Circuit Judges.
O’MALLEY, Circuit Judge.
This case has been before us on four prior occasions. At
issue is the government’s obligation under World War II-
era contracts to indemnify Shell Oil Company; Atlantic
Richfield Company; Texaco, Inc.; and Union Oil Company
of California (collectively, “the Oil Companies”) for environ-
mental remediation costs they incurred due to their pro-
duction of aviation gasoline (“avgas”) for the war effort. We
have held that the government is contractually liable to re-
imburse these costs. Shell Oil Co. v. United States, 751
F.3d 1282, 1293 (Fed. Cir. 2014) (“Liability Decision”). And
we have confirmed that the government’s contractual obli-
gations encompass all of the remediation costs that the Oil
Companies have incurred. Shell Oil Co. v. United States,
896 F.3d 1299, 1310–11 (Fed. Cir. 2018) (“Damages Deci-
sion”). Consistent with those decisions, in 2019, the gov-
ernment reimbursed the Oil Companies for the
remediation costs incurred through November 2015, and
interest thereon.
Because remediation efforts remain ongoing, the Oil
Companies filed suit in the United States Court of Federal
Claims (“Claims Court”), seeking damages for additional
remediation costs incurred between November 2015 and
November 2019, and for interest related to those costs. The
Claims Court found the government liable for remediation
costs incurred from November 30, 2015 through September
30, 2019, as well as interest accruing through the date of
final payment. Shell Oil Co. v. United States, 148 Fed. Cl.
781, 796–97 (2020) (“Shell II”). The government appeals
from that decision, arguing that: (1) res judicata bars the
Oil Companies’ claims for damages; and (2) the Claims
Court erred in finding that it had jurisdiction over the Oil
Companies’ claims under the Contract Settlement Act of
1944 (“CSA”) and, thus, erred in awarding interest under
the CSA. We disagree with the government on both points
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SHELL OIL COMPANY v. US 3
and affirm the Claims Court’s decision. In doing so, we
hope to put an end to the government’s continued re-
sistance to making payments we have found it is obligated
to make.
I. BACKGROUND
A. The Avgas Contracts
During World War II, the United States needed large
quantities of avgas for use in airplane engines. Avgas be-
came “the most critically needed refinery product during
World War II.” Damages Decision, 896 F.3d at 1303. “[T]he
Government recognized the need to quickly mobilize avgas
production . . . stating: ‘It is essential, in the national inter-
est that the supplies of all grades of aviation gasoline for
military, defense and essential civilian uses be increased
immediately to the maximum.’” Liability Decision, 751
F.3d at 1286 (emphasis omitted). Accordingly, between
1942 and 1943, the government, through the Defense Sup-
plies Corporation (“DSC”), entered into contracts with the
Oil Companies to facilitate avgas production (“the Avgas
Contracts”).
The Avgas Contracts required the Oil Companies to
rapidly “expand avgas production facilities” and “sell vast
quantities of avgas” to the government with an artificially
low profit margin between six and seven percent. Id. at
1286 n.3, 1286–87. “The Oil Companies agreed to the
avgas contracts’ low profits in return for the Government’s
assumption of certain risks outside of the Oil Companies’
control.” Id. at 1296. As relevant here, the government
agreed to reimburse the Oil Companies for “any new or ad-
ditional taxes, fees, or charges” which the Oil Companies
“may be required by any municipal, state, or federal law in
the United States or any foreign country to collect or pay
by reason of the production, manufacture, sale or delivery
of the [avgas].” Id. at 1287.
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4 SHELL OIL COMPANY v. US
The Oil Companies’ performance of the Avgas Con-
tracts helped to increase the country’s avgas production
from 40,000 barrels a day in December 1941 to 514,000 bar-
rels a day by 1945. Id. at 1287. It is undisputed that the
increased avgas production during the war led to increased
amounts of acid waste. Although there was technology to
reprocess acid waste, and the Oil Companies did, in fact,
reprocess much of the waste, there was a massive amount
of waste that overwhelmed the existing reprocessing facil-
ities. And, although the Oil Companies asked the govern-
ment to construct new facilities, the government refused,
prioritizing avgas production over the transportation of
acid waste for reprocessing and over the construction of ad-
ditional reprocessing facilities. Id. at 1288.
As a result, the Oil Companies entered into contracts
with an individual named Eli McColl to dispose of the acid
waste at what became known as the McColl site in Fuller-
ton, California. The Oil Companies disposed of acid waste
at the McColl site from 1942 until shortly after the war
ended in 1945, when the need for avgas plummeted and the
government terminated the contracts. Id. “The McColl site
closed on September 6, 1946.” Damages Decision, 896 F.3d
at 1304.
B. The Prior Litigation
In 1991, forty-five years after the McColl Site closed,
the United States and the State of California filed suit
against the Oil Companies under the Comprehensive En-
vironmental Response, Compensation, and Liability Act of
1980 (“CERCLA”), 42 U.S.C. §§ 9601, et seq., in the United
States District Court for the Central District of California,
seeking to require the Oil Companies to pay cleanup costs
arising from the acid waste generated during World War II
pursuant to the Avgas Contracts. The Oil Companies coun-
terclaimed against the United States, asserting that the
government should be held liable for the CERCLA costs.
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SHELL OIL COMPANY v. US 5
The district court first found both the Oil Companies
and the United States jointly and severally liable. United
States v. Shell Oil Co., 841 F. Supp. 962, 974–75 (C.D. Cal.
1993). But the court later allocated all of the cleanup costs
to the government as an “arranger” of the disposal. United
States v. Shell Oil Co., 13 F. Supp. 2d 1018, 1030 (C.D. Cal.
1998).
On appeal, the Ninth Circuit affirmed the district
court’s decision that the government was 100% liable for
the cost of cleaning up the benzol waste (which was about
5.5% of the waste) at the McColl site, but reversed its deci-
sion that the government was liable as an “arranger” for
the non-benzol waste. United States v. Shell Oil Co., 294
F.3d 1045, 1048–49 (9th Cir. 2002). Specifically, the court
found that the government “was the end purchaser of
avgas, and was thus more like a customer of the [avgas]
manufacturers than like the manufacturers themselves.”
Id. at 1056. Given the Ninth Circuit’s holding on “ar-
ranger” liability, the Oil Companies have borne nearly all
of the clean-up costs incurred since 1994.
After remand from the Ninth Circuit, the district court
transferred the Oil Companies’ indemnification counter-
claims to the Claims Court. The Oil Companies voluntarily
dismissed the transferred counterclaims without prejudice
so that they could first exhaust their administrative reme-
dies. The Oil Companies submitted to the General Services
Administration (“GSA”) (the successor to DSC) a termina-
tion claim pursuant to the CSA, seeking reimbursement
under the Avgas Contracts for environmental remediation
costs at the McColl site. GSA denied the claim in 2006.
On February 24, 2006, the Oil Companies filed suit in
the Claims Court, seeking reimbursement of the CERCLA
cleanup costs from the United States. The court granted
summary judgment in favor of the Oil Companies, finding
the government liable under the Avgas Contracts for all
cleanup costs at the McColl site. Shell Oil Co. v. United
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6 SHELL OIL COMPANY v. US
States, 80 Fed. Cl. 411, 420 (2008). We vacated that judg-
ment on appeal because the judge to whom the case was
assigned had a financial conflict of interest. Shell Oil Co.
v. United States, 672 F.3d 1283, 1290–91 (Fed. Cir. 2012).
On remand, the case was reassigned, and the Claims
Court again granted summary judgment in 2013, this time
in favor of the government. Shell Oil Co. v. United States,
108 Fed. Cl. 422, 448 (2013). This court reversed, holding
that “[t]he plain language of the new or additional charges
provision thus requires the Government to indemnify the
Oil Companies for CERCLA costs incurred ‘by reason of’
the avgas contracts.” Liability Decision, 751 F.3d at 1293.
We remanded the case for the Claims Court “to determine
how much acid waste at the McColl site was ‘by reason of’
the avgas contracts.” Id. at 1303.
The Claims Court held a trial on damages in early
2016. Following that trial, the court found that “all of the
acid waste disposed of at the McColl Site was ‘by reason of’
the Avgas Contracts,” and awarded the Oil Companies
$99,509,847.32 in damages. Shell Oil Co. v. United States,
130 Fed. Cl. 8, 34 (2017) (“Shell I”). This amount repre-
sented 100 percent of the costs that the Oil Companies had
incurred at the McColl site through November 30, 2015,
plus the interest on those costs through the date of judg-
ment.
In July 2018, we affirmed the Claims Court’s judg-
ment. The government did not seek rehearing en banc.
Nor did it petition the Supreme Court for a writ of certio-
rari. The judgment in favor of the Oil Companies became
final, and the government paid the Oil Companies in April
2019.
C. The Present Litigation
Remediation of the McColl site remains ongoing. At
this stage, the dispute between the parties involves:
(1) cleanup costs the Oil Companies have continued to
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SHELL OIL COMPANY v. US 7
incur since November 30, 2015, the end of the period ad-
dressed in the 2016 damages trial; and (2) interest that
continues to accrue on those costs. The Oil Companies sub-
mitted a formal demand for these costs and interest to GSA
in July 2019, but received no response.
On November 22, 2019, the Oil Companies filed this
action in the Claims Court pursuant to Section 13(c)(2) of
the CSA, 41 U.S.C. § 113(c)(2). The complaint alleged that,
between December 1, 2015 and September 30, 2019, the Oil
Companies paid an additional $1,543,840.68 to the contrac-
tor overseeing remediation at the McColl site, and
$69,300.00 to the contractor providing security at the
site—a total of $1,613,140.68. J.A. 389. The Oil Compa-
nies sought reimbursement of those costs as well as inter-
est accruing through the date of payment pursuant to the
CSA. 1
The Oil Companies moved for summary judgment soon
after filing the complaint, and the government filed a re-
sponse and motion to dismiss. On June 29, 2020, the
Claims Court issued its decision granting both motions in
part and denying them in part. The court concluded that
the government was liable under the Avgas Contracts for
the continuing cleanup costs and that the Oil Companies
were “entitled to indemnification and associated interest
through the date of payment for remediation costs incurred
after November 30, 2015 through November 15, 2019,”
1 The CSA provided that federal agencies shall “pay
interest on the amount due and unpaid from time to time
on any termination claim under a prime contract at the
rate of 2.5 per centum per annum for the period beginning
thirty days after the date fixed for termination and ending
with the date of final payment.” 41 U.S.C. § 106(f) (re-
pealed 2011).
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8 SHELL OIL COMPANY v. US
which remediation costs amounted to approximately $1.6
million. Shell II, 148 Fed. Cl. at 785, 796. 2
In its decision, the Claims Court concluded that res ju-
dicata did not bar the Oil Companies’ claim for costs in-
curred after November 30, 2015, and related interest on
those costs. Id. at 790. The court agreed with the Oil Com-
panies that their claims were “not barred by res judicata
because they fall within a partial breach exception to gen-
eral claim preclusion principles.” Id. As the court ex-
plained, “the general rule is that when one party has
performed its duties under a contract and the other party’s
obligations are ongoing, a breach by the latter party must
be considered partial.” Id. at 791. Applying this principle,
the court determined that “the oil companies’ initial law-
suit must be classified as a suit for partial, not total, breach
insofar as it sought indemnification for past cleanup costs
at the McColl site.” Id. Specifically, the Claims Court ex-
plained that, “when ‘[t]he [g]overnment breached its con-
tract 60 years after the [o]il [c]ompanies had finished
performing under the [a]vgas [c]ontracts,’ they stood ‘in the
position of an annuitant or a creditor exacting payment
from a debtor’ and as such were ‘compelled to wait for the
installments as they severally mature.’” Id.
The Claims Court rejected the government’s argument
that “the oil companies cannot now characterize the prior
claims as claims for a partial breach when they originally
elected to plead a total breach, thereby merging their de-
mands for future damages into the judgment awarding
2 The Oil Companies also sought approximately $5.7
million in post-judgment interest “accrued through the
date of payment on the charges awarded” in Shell I. Shell
II, 148 Fed. Cl. at 792. The Claims Court held that the Oil
Companies were not entitled to that interest because they
failed to seek it in Shell I. Id. at 792–93. The Oil Compa-
nies have not appealed that decision.
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SHELL OIL COMPANY v. US 9
past damages.” Id. The court explained that, “even if the
oil companies in their complaint in the prior action had
sought future costs, plaintiffs could not effectively elect to
treat their claims for future costs as part of a total breach.”
Id. Indeed, “contract law precludes recovery for specula-
tive damages,” and “an attempt by the oil companies at the
time of the first suit to project future costs they might (or
might not) incur” could only be described as speculative.
Id. (citation omitted). As such, the court concluded that
“those claims for speculative future damages did not merge
into the judgment rendered but were simply put aside and
not reflected in, or addressed by, the judgment.” Id.
Next, the Claims Court held that it had jurisdiction un-
der the CSA (and thus could award interest provided under
that statute) notwithstanding the partial repeal of the CSA
in 2011, “because the rights and duties of the parties had
matured before” the repeal. Id. at 793. In doing so, the
court rejected the government’s argument that any “duties”
it may have had could not have “matured” until the Oil
Companies submitted their formal claim for reimburse-
ment in 2019.
The court held that:
[u]nder the plain language of the agreements, the
government’s duty to pay any new or additional
charges the oil companies incurred by reason of the
production of avgas was not contingent on the oil
companies’ act of seeking reimbursement, but in-
stead upon their incurrence of new liabilities dic-
tated by federal law. The agreements thus indicate
that the government’s duty to pay arose at what-
ever time the oil companies became liable to pay
charges required by CERCLA due to their produc-
tion of avgas—and both parties agree that that
happened, at the latest, when the oil companies
were found liable for remediation at the McColl site
in the 1990s, well before the CSA’s repeal. That no
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10 SHELL OIL COMPANY v. US
breach could occur until the oil companies de-
manded performance is irrelevant to whether the
government previously had an existing duty to
eventually perform.
Id. at 794.
The Claims Court therefore concluded that the Oil
Companies were entitled to indemnification for remedia-
tion costs incurred at the McColl site from November 30,
2015 through September 30, 2019, plus interest on such
costs, accruing through the date of final payment, at the
rate and terms specified in 41 U.S.C. § 106(f). Id. at 796–
97.
The government timely appealed. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(3).
II. DISCUSSION
We review a Claims Court decision granting summary
judgment de novo. 1st Home Liquidating Trust v. United
States, 581 F.3d 1350, 1355 (Fed. Cir. 2009). Summary
judgment is appropriate if, when viewing the evidence in
the light most favorable to the nonmoving party, the record
indicates that there is “no genuine issue as to any material
fact and that the moving party is entitled to judgment as a
matter of law.” Id. (quoting R. Ct. Fed. Cl. 56(c); Fed. R.
Civ. P. 56(c)).
On appeal, the government argues that the Claims
Court made two reversible errors. First, the government
argues that the court erred when it “failed to apply res ju-
dicata to redundant costs in this case (Shell II) that the oil
companies sought in their 2005 administrative claim.” Ap-
pellant’s Br. 11. Second, the government maintains that
the court misinterpreted the savings clause of the CSA’s
repealer statute. According to the government, the court
should have found that “the long-repealed CSA did not ap-
ply because no ‘rights and duties’ had ‘matured’ as of the
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SHELL OIL COMPANY v. US 11
effective date of the CSA’s repeal.” Id. We address each
issue in turn.
A. Res Judicata
“Under res judicata, a final judgment on the merits of
an action precludes the parties or their privies from reliti-
gating issues that were or could have been raised in that
action.” Allen v. McCurry, 449 U.S. 90, 94 (1980) (citing
Cromwell v. County of Sac., 94 U.S. 351, 352 (1876)). Res
judicata applies where “(1) there is identity of parties (or
their privies); (2) there has been an earlier final judgment
on the merits of a claim; and (3) the second claim is based
on the same set of transactional facts as the first.” Levi
Strauss & Co. v. Abercrombie & Fitch Trading Co., 719
F.3d 1367, 1372 (Fed. Cir. 2013). “The doctrine of res judi-
cata rests at bottom upon the ground that the party to be
affected . . . has litigated or had an opportunity to litigate
the same matter in a former action in a court of competent
jurisdiction.” Richards v. Jefferson Cty., 517 U.S. 793, 797
n.4 (1996). A judgment is generally res judicata “not only
as to all matters litigated and decided by it, but as to all
relevant issues which could have been but were not raised
and litigated in the suit.” Heiser v. Woodruff, 327 U.S. 726,
735 (1946).
We have recognized a partial breach exception to gen-
eral claim preclusion principles. Indiana Michigan Power
Co. v. United States, 422 F.3d 1369, 1377–78 (Fed. Cir.
2005). Where a breach is partial, “the injured party may
recover damages for nonperformance only to the time of
trial and may not recover damages for anticipated future
nonperformance.” Id. at 1376. That is so because “prospec-
tive damages for anticipated future nonperformance re-
sulting from the same partial breach” are “highly
speculative,” and contract law precludes recovery for spec-
ulative damages. Id. Accordingly, we have held that,
“[w]hen a party sues for partial breach, it retains its right
to sue for damages for its remaining rights to
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12 SHELL OIL COMPANY v. US
performance.” Id. at 1377. That is, “in a case involving a
continuing or recurrent wrong,” “[a] judgment in an action
for breach of contract does not normally preclude the plain-
tiff from thereafter maintaining an action for breaches of
the same contract that consist of failure to render perfor-
mance due after commencement of the first action.” Id.(quoting Restatement (Second) of Judgments § 26, cmt. g).
Here, the Claims Court noted that, “when one party
has performed its duties under a contract and the other
party’s obligations are ongoing, a breach by the latter party
must be considered partial.” Shell II, 148 Fed. Cl. at 791.
The court explained that “the oil companies’ initial lawsuit
must be classified as a suit for partial, not total, breach in-
sofar as it sought indemnification for past cleanup costs at
the McColl site.” Id. And, as noted, the court rejected the
government’s argument that “the oil companies cannot now
characterize the prior claims as claims for a partial breach
when they originally elected to plead a total breach,
thereby merging their demands for future damages into
the judgment awarding past damages.” Id.
On appeal, the government argues that, in Shell I, the
Oil Companies “sought, among other past and future costs,
the exact same future costs at issue in this case.” Appel-
lant’s Br. 11. According to the government, because the
Shell I court asserted jurisdiction over the entire complaint
and issued a final judgment, “any future costs that the oil
companies were seeking were either contained in that judg-
ment or, specifically regarding the future costs the oil com-
panies currently seek, were extinguished when the Shell I
judgment became final.” Id. at 11–12. The government
maintains that the dispositive question is not whether the
future costs claimed in Shell I were viable, but whether
they were asserted in the complaint and not dismissed with
prejudice before judgment. Specifically, it argues that,
“[a]lthough the oil companies ultimately did not seek recov-
ery for the future cost claims in Shell I, they never sought
to dismiss them voluntarily, and the court entered a final
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SHELL OIL COMPANY v. US 13
judgment for a sum certain that provided no basis to con-
clude that it was dismissing those abandoned claims with-
out prejudice, which would be required to escape res
judicata.” Id. at 19.
The government’s arguments on appeal are overly
technical and ultimately unpersuasive. As an initial mat-
ter, it is worth noting what the government is not arguing.
The government does not deny that its breach was partial.
Nor does it suggest that the Oil Companies could have re-
covered the costs in this action in the prior Shell I litiga-
tion. Instead, the government takes the position that,
regardless of whether the Claims Court could have
awarded future damages in Shell I, any claims for such
damages are now barred because the Oil Companies in-
cluded a request for future damages in their Shell I com-
plaint. We disagree.
First, it is worth noting that, despite the government’s
description of the complaint in Shell I, the Oil Companies
never expressly asked for all future damages or alleged an-
ything other than a partial breach. J.A. 101–02. The gov-
ernment claims that fact is of no moment because the Oil
Companies’ administrative claim included an estimate for
future costs and requested a determination that the gov-
ernment would pay for costs incurred in the future. See
J.A. 29. The fact that a party seeks final resolution of an
ongoing dispute in an administrative filing does not mean
that the actual complaint filed in court bars future claims
on res judicata grounds, however.
Second, as the Claims Court correctly explained, “even
if the oil companies in their complaint in the prior action
had sought future costs, plaintiffs could not effectively elect
to treat their claims for future costs as part of a total
breach.” Shell II, 148 Fed. Cl. at 791. Because contract
law precludes recovery for speculative damages, the “mere
fact that plaintiffs asserted those claims in their complaint
in the first case did not make them viable claims.” Id.
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14 SHELL OIL COMPANY v. US
Accordingly, we agree with the Claims Court that any
claims for future speculative damages “did not merge into
the judgment rendered but were simply put aside and not
reflected in, or addressed by, the judgment.” Id.
The partial breach doctrine makes clear that damages
that could not have been sought in a prior action because
they had not yet accrued may be sought in a subsequent
action. Indiana Michigan, 422 F.3d at 1377. As the Claims
Court correctly explained, “the general rule is that when
one party has performed its duties under a contract and the
other party’s obligations are ongoing, a breach by the latter
party must be considered partial.” Shell II, 148 Fed. Cl. at
791. And, because the government breached the Avgas
Contracts decades after the Oil Companies finished perfor-
mance, the Oil Companies “stood ‘in the position of an an-
nuitant or a creditor exacting payment from a debtor’ and
as such were ‘compelled to wait for the installments as they
severally mature.’” Id. For these reasons, we agree with
the Claims Court that the partial breach doctrine was ap-
plicable here, notwithstanding the Oil Companies’ request
for future damages in Shell I.
The government argues that the Claims Court’s reli-
ance on Indiana Michigan was misplaced because there,
the plaintiff sued for partial breach in the complaint. Ap-
pellant’s Br. 17. In that case, which involved the govern-
ment’s breach of a standard contract for the disposal of
spent nuclear fuel, Indiana Michigan sued the government,
seeking both pre-breach mitigation costs and future dam-
ages. Indiana Michigan, 422 F.3d at 1371–72. The Claims
Court denied Indiana Michigan’s claimed damages, hold-
ing that, because Indiana Michigan claimed partial versus
total breach, recovery for pre-breach mitigation costs and
present recovery for future damages was precluded. Id. at
1373. On appeal, we held that Indiana Michigan’s claim
was for partial breach. We explained that, while “[f]uture
damages could have been awarded had Indiana Michigan
claimed total breach,” “[i]f the breach is partial only, the
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SHELL OIL COMPANY v. US 15
injured party may recover damages for nonperformance
only to the time of trial and may not recover damages for
anticipated future nonperformance.” Id. at 1376.
We then clarified how res judicata applies in the partial
breach context. Noting that the government “agreed . . .
that Indiana Michigan [could] maintain future suits,” we
held that, “[i]f the breach of an entire contract is only par-
tial, the plaintiff can recover only such damages as he or
she has sustained, leaving prospective damages to a later
suit in the event of further breaches.” Id. at 1377 (quoting
22 Am. Jur. 2d Damages § 488 (2003)). Therefore, under
Indiana Michigan, if a plaintiff brings a claim for partial
breach, res judicata does not bar subsequent lawsuits to
recover future damages for further breaching acts. Id.
While Indiana Michigan did not involve the exact same
procedural posture as this case, it demonstrates that the
partial breach doctrine applies to contract claims like the
one here, and that subsequent partial breach claims will
not be precluded by res judicata. We have consistently ap-
plied this principle, reiterating that a subsequent suit “is
not barred by claim preclusion—regardless of whether the
same transactional facts are present in both suits—to the
extent [the party’s] allegations are temporally limited to
acts occurring after final judgment was entered in the first
suit.” Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1054
(Fed. Cir. 2014).
The bottom line is that a plaintiff cannot be precluded
from bringing a claim that was unavailable in the first ac-
tion—either because the breach was partial or because the
conduct at issue had not yet occurred at the time of the first
suit. See Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322,
328 (1955) (explaining that a prior judgment “cannot be
given the effect of extinguishing claims which did not even
then exist and which could not possibly have been sued
upon in the previous case”). This is true regardless of the
relief sought in the first action. See id. (finding that the
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16 SHELL OIL COMPANY v. US
prior suit did not bar the second, even though the first com-
plaint sought “injunctive relief which, if granted, would
have prevented the illegal acts” plaintiffs complained of in
the second suit). The government’s arguments to the con-
trary are inconsistent with settled res judicata principles.
We therefore agree with the Claims Court that the Oil
Companies’ successive partial breach claim was not barred
by res judicata.
B. The CSA
In 2011, Congress repealed the CSA. The government
maintains that this repeal deprived the Claims Court of ju-
risdiction to hear the Oil Companies’ CSA claims, which
were filed in 2019. According to the government, the Oil
Companies should have filed suit under the Contract Dis-
putes Act or the Tucker Act. 3 But Congress’s repeal of the
CSA included a savings clause: “The laws specified in the
following schedule are repealed, except for rights and du-
ties that matured, penalties that were incurred, and pro-
ceedings that were begun before the date of enactment of
3 The government acknowledges that the Oil Compa-
nies could have filed suit under Tucker Act, 28 U.S.C.
§ 1491(a)(1), and does not object to the trial court’s exercise
of jurisdiction over the Oil Companies’ claims for cost reim-
bursement, except on res judicata grounds. Appellant’s Br.
11, n.2. The question of whether the Claims Court had ju-
risdiction under the CSA is important, however, because
the interest award to the Oil Companies was authorized by
the CSA, 41 U.S.C. § 106(f), and interest is not available
under the Tucker Act. See Richlin Sec. Serv. Co. v.
Chertoff, 437 F.3d 1296, 1299 (Fed. Cir. 2006) (“The Su-
preme Court has long held that ‘interest cannot be recov-
ered in a suit against the ‘[G]overnment in the absence of
an express waiver of sovereign immunity from an award of
interest.’” (quoting Libr. of Congress v. Shaw, 478 U.S. 310,
311 (1986)).
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SHELL OIL COMPANY v. US 17
this Act.” Pub. L. 111-350, 124 Stat. 3677, 3855 (Jan. 4,
2011). The parties dispute whether the savings clause ap-
plies to preserve the Oil Companies’ CSA claims. Resolu-
tion of this issue turns on whether the rights and duties of
the parties matured before the repealing statute was en-
acted. The Claims Court found that they did. We agree.
The Oil Companies’ rights at issue and the govern-
ment’s corresponding duties stem from the indemnification
provision in the Avgas Contracts. That provision provides
that the government must pay “any new or additional
taxes, fees, or charges” which the Oil Companies “may be
required by any municipal, state, or federal law in the
United States or any foreign country to collect or pay by
reason of the production, manufacture, sale or delivery of
[avgas].” Shell II, 148 Fed. Cl. at 785–86 (emphasis in orig-
inal). Under this provision, the Oil Companies had a right
to reimbursement and the government had a correspond-
ing duty to indemnify. Id. at 794.
As the Claims Court explained, “[t]he contracts did not
specify a precise time for performance.” Id. Nor could they,
given the “unforeseeable nature of the costs” contemplated.
Id. But the Avgas Contracts make clear that the govern-
ment has a duty to indemnify the Oil Companies when a
“federal law” “required” the companies “to . . . pay” “new or
additional . . . charges” “by reason of the production of”
avgas. Id. at 785–86. Given this language, we agree with
the Claims Court that the government’s duty to indemnify
was triggered, at the latest, when the Oil Companies were
found liable under CERCLA due to their production of
avgas. Id. at 794. It is undisputed that this occurred in
the 1990s, “well before the CSA’s repeal.” Id.
On appeal, the government argues that, under the
CSA’s mandatory administrative claims process, it “had no
duty to pay the oil companies’ claims until they presented
their termination claim to GSA in 2019.” Appellant’s Br.
22–23. According to the government, because the Oil
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18 SHELL OIL COMPANY v. US
Companies had no “right” to sue under the CSA until they
exhausted their administrative remedies, no “duty” to pay
matured until after 2011. Id. at 23. We disagree.
The government seems to be drawing a distinction be-
tween its contractual duty to indemnify the Oil Companies
under the Avgas Contracts—which is the relevant duty for
purposes of the CSA’s savings clause—and its CSA duty to
resolve a termination claim submitted under that statute.
Appellant’s Br. 24. As the Claims Court explained, how-
ever, “[t]he CSA does not dictate when the rights and du-
ties defined in a contract mature for purposes of the
savings clause in the repealing statute; rather, it defines a
set of procedural rules that are unrelated to the substan-
tive legal obligations arising under an independent con-
tractual agreement like the one here.” Shell II, 148 Fed.
Cl. at 795.
Under the terms of the Avgas Contracts, “the govern-
ment’s duty to pay any new or additional charges the oil
companies incurred by reason of the production of avgas
was not contingent on the oil companies’ act of seeking re-
imbursement, but instead upon their incurrence of new li-
abilities dictated by federal law.” Id. at 794. The
government’s contractual duties, within the meaning of the
savings clause, matured (at the latest) when the Oil Com-
panies were held liable under CERCLA to pay environmen-
tal remediation costs at the McColl site. If Congress had
meant to limit the savings clause to claims that had been
presented to the agency prior to the repeal, it could have
done so. Instead, the savings clause preserves claims
based on when the claimant’s rights and the government’s
duties matured. Here, the plain language of the Avgas
Contracts indicates that the government’s duty to indem-
nify matured in tandem with the Oil Companies’ liability
under CERCLA.
The government cites Tektel, Inc. v. United States, 121
Fed. Cl. 680 (2015), for the proposition that it had no duty
Case: 20-2221 Document: 40 Page: 19 Filed: 08/04/2021
SHELL OIL COMPANY v. US 19
to indemnify the Oil Companies until they exhausted the
CSA’s procedure. But in Tektel, which is not binding on
this court, the contract specifically required the plaintiff to
exhaust administrative remedies before seeking judicial
review. Id. at 686. As such, Tektel’s right to seek judicial
relief could not have matured until it had exhausted its ad-
ministrative remedies, because those remedies were part
of the contract. Here, nothing in the Avgas Contracts re-
quires the Oil Companies to comply with the CSA’s proce-
dures—let alone requires them to do so before they are
entitled to indemnification. Notably, the CSA was not en-
acted until years after the Oil Companies entered into the
Avgas Contracts.
The government also submits that, under G.L. Chris-
tian & Associates v. United States, 312 F.2d 418 (Ct. Cl.
1963), statutory and regulatory provisions must be deemed
included within government contracts by law if they are:
(1) required; and (2) involve a “deeply ingrained strand” of
procurement policy. Appellant’s Br. 26 (quoting Gen. Eng’g
& Mach. Works v. O’Keefe, 991 F.2d 775, 779 (Fed. Cir.
1993)). We have recognized that “Christian stands for the
proposition that if the parties to a government contract ne-
glect to include a clause in the contract that is otherwise
required by regulation . . . courts will read the clause into
the contract as a matter of law.” Rockies Exp. Pipeline LLC
v. Salazar, 730 F.3d 1330, 1338 (Fed. Cir. 2013) (citing
Christian, 312 F.2d at 426–27). The government cites no
authority establishing that exhaustion requirements were
mandatory in government war contracts at the time of the
Avgas Contracts. And nothing suggests that the CSA man-
dated its procedures retroactively into the Avgas Con-
tracts. Accordingly, we find that Christian does not apply.
We agree with the Claims Court that the government’s
duty to indemnify the Oil Companies and the Oil Compa-
nies’ right to reimbursement for remediation costs under
the Avgas Contracts both matured well before the repealer
statute’s enactment. The Claims Court therefore correctly
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20 SHELL OIL COMPANY v. US
concluded that it had jurisdiction over the Oil Companies’
CSA claims.
III. CONCLUSION
We have considered the government’s remaining argu-
ments and find them unpersuasive. For the foregoing rea-
sons, we affirm the Claims Court’s decision.
AFFIRMED