Contractor’s Claim Against U.S. Stays Out of COFC

by Victoria Tollossa

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A federal contractor has used a rare exception to keep its case for monetary damages against the Government out of the Court of Federal Claims (“COFC”). In J-Way Southern Inc. v. U.S., the United States District Court for the District of  Massachusetts has denied the Government’s request to remove the case despite the long standing that the COFC has exclusive jurisdiction over contract claims against the U.S. in excess of $10,000.

There are distinct advantages if contractors can keep their claims against the Government in a federal district court, e.g. the contractor can demand trial by jury.  While it may be difficult to prove empirically, many plaintiff’s attorneys believe a jury is more likely than a judge to sympathize with a company’s frustrations in terms of dealing with the Government. The theory is that juries do not typically get as caught up in the details of protections the government gives itself in contract matters and typically rule in favor of the party that seems right.  If you are pursuing a contract claim, such as a failed Request for Equitable Adjustment, having a sympathetic everyman/woman on the jury could tip things in your favor. However, the chances your case qualifies to stay in a federal district court are still rare.

The exception applied in J-Way is just that, an exception. The judge focused on a little used provision of the Contract Disputes Act that only applies with maritime contracts, 41 U.S.C. § 7102(d). The decision does somewhat expand what qualifies for this exception. The contractor in J-Way used land-based construction equipment to dredge a small waterway. While this work appears to be typical construction, because the purpose of the contract was to support maritime activities, the court applied the maritime exception. While the circumstances remain rare, it is always worth considering exceptions like this to give your claim a better fighting chance when possible.