Justia Contracts Opinion Summaries

GSS Group brought this action to confirm a foreign arbitration award against the Port Authority of Liberia. The district court dismissed the petition for lack of personal jurisdiction after concluding that the Port Authority did not have sufficient contacts with the United States. The court concluded that the Port Authority claimed to be an independent juridical entity in its motion to dismiss, and GSS Group failed to contest that characterization. GSS Group's omission left in tact the Bancec presumption, First National City Bank v. Banco Para el Comercio Exterior de Cuba, which, under TMR Energy v. State Property Fund of Ukraine, guaranteed the Port Authority treatment as a separate "person" entitled to due process protection. That protection included the right to assert a minimum contacts defense. GSS Group had not identified any connection between the Port Authority and the United States and conceded that none existed. Therefore, the district court correctly dismissed the petition for lack of personal jurisdiction.

This case involved a dispute over operation of an Exxon gas station located next to the Watergate in Washington, D.C. Metroil sued Exxon and Anacostia, claiming three violations of federal and D.C. law relating to the sale of the station by Exxon to Anacostia. The court concluded that the Retail Service Station Amendment Act of 2009, D.C. Code 36-304.12(a), did not take effect until after Exxon's sale to Anacostia and the law therefore did not give Metroil a right of first refusal in this case. Because it was undisputed that Metroil still operates the gas station, buys and sells Exxon fuel, and uses the Exxon trademark, the franchise relationship has continued. Therefore, Metroil's Petroleum Marketing Practices Act, 15 U.S.C. 2802, claim was properly dismissed. All of the burdens and risks alleged by Metroil were permitted by the original contract and were not attributable to the assignment. Therefore, the court rejected Metroil's claims that Exxon violated the D.C. Code's prohibition against contract assignments that materially increased the burden or risk on the non-assigning party. Accordingly, the court affirmed the judgment.

Noble Energy and other lessees sued in the Court of Federal Claims, alleging that application of the Coastal Zone Management Act, 16 U.S.C. 1451-1464, suspension requests constituted a material breach of their lease agreements to drill for, develop, and produce oil and natural gas on submerged lands off the coast of California. The Court of Federal Claims agreed; on appeal the Federal Circuit affirmed. One year after the Federal Circuit's decision in the breach-of-contract litigation, the Minerals Management Service (MMS), sent a letter to Noble ordering it to plug and abandon Well 320-2 permanently. The district court ruled that the common law doctrine of discharge did not relieve Noble of the regulatory obligation to plug its well permanently, an obligation that the lease did not itself create. Resolution of the dispute depended on what the plugging regulations meant. The court held that it was up to MMS's successor to interpret its regulation in the first instance and to determine whether they apply in situations like Noble's. If they do, the agency must explain why. Therefore, the court vacated the judgment and sent the case back to the district court with instructions to vacate Interior's order and to remand to the Secretary for further proceedings.

The Department petitioned for review of a decision of the Authority that adopted a new standard to determine when a negotiated contract provision was an "appropriate arrangement" under 5 U.S.C. 7106(b)(3) and an agency head's disapproval thereof would therefore be set aside. Because the Department failed to move for reconsideration objecting to the Authority's use of the abrogation standard to review the agency head's disapproval of the negotiated agreement, the court dismissed the Department's petition for lack of subject matter jurisdiction pursuant to section 7123(c).

El Paso operated an interstate pipeline that transported natural gas to California and other western states, and Freeport shipped gas on El Paso's pipeline to power its various mining, smelting, and refining facilities. El Paso and Freeport separately challenged several orders of the Commission issued in connection with El Paso's 2005 rate filing and subsequent settlement. The court denied the petition for review and held that the Commission's reasoning was sound when it found that the CAP Orders had neither changed the bargain underlying the 1996 Settlement nor abrogated Article 11.2 of the Settlement. The court also held that the Commission reasonably determined the converted FR contracts were "amended" within the meaning of that term in Article 11.2; Article 11.2 applied to turnback capacity; the applicable rate cap for turnback capacity was determined by the shipper's delivery point; Article 11.2 did not apply to capacity created by the Line 2000 project; and where the Commission adopted the presumption that the capacity of El Paso's system on December 31, 1995 was 4000 MMcf/d. The court further found that the Commission's approval of the Settlement appropriate under the so-called Trailblazer Pipeline Co. approach. Accordingly, the Commission's orders were not arbitrary or capricious and the petitions for review were denied.

This case arose when the U.S. Customs and Border Protection (CBP), division of the Department of Homeland Security, changed local work assignments for its inspectors without first negotiating with their union. CBP petitioned for review of the Federal Labor Relations Authority's (Authority) affirmance of an arbitrator's conclusion that this was an unfair labor practice. The court denied the petition for review and rejected CBP's argument that it had no duty to bargain over the disputed changes in work assignment policies because the changes were "covered by" the Revised National Inspectional Assignment Policy (RNIAP) and that, in the alternative, that CBP had no duty to bargain over the changes it made pursuant to the RNIAP because they did not alter inspectors' "conditions" of employment. Accordingly, the court deferred to the Authority's reasonable determination that the RNIAP was not a collective bargaining agreement subject to the "covered by" doctrine and the Authority's reasonable conclusion that the cases CBP cited did not govern the dispute here. Therefore, the court held that the Authority adequately explained its conclusion.

Spectrum Health -- Kent Community Campus (Spectrum) withdrew recognition from its employees' union after receiving a petition indicating that the union no longer had majority support. The NLRB found this action unlawful because it occurred within the first three years of the parties' collective bargaining agreement, during which time a union enjoyed a conclusive presumption of majority support. The court held that the NLRB properly interpreted the term of the collective bargaining agreement and that Spectrum waived its objections to the bargaining order by failing to raise them in a timely manner before the NLRB. Accordingly, the court denied Spectrum's petition for review and granted the NLRB's cross-application for enforcement.

This case stemmed from a collective bargaining agreement executed in 1998 by the Federal Bureau of Prisons and the American Federation of Government Employees, Council of Prison Locals No. 33. The Bureau petitioned for a review of a decision of the Federal Labor Relations Authority holding that the Bureau had a duty to bargain over its implementation of a "mission critical" standard for staffing federal correctional institutions. The court held that because the Authority unreasonably concluded the mission critical standard was not "covered by" the collective bargaining agreement between the Bureau and its employees' union, the court granted the petition and vacated the Authority's decision.

Appellant charged his former employer, the Small Business Administration (SBA), with discrimination and the parties subsequently entered a settlement agreement where one of the terms of the settlement agreement required the SBA to provide neutral references when potential employers inquired about appellant. Appellant claimed that the SBA materially breached that requirement and sued the SBA in district court. At issue was whether the district court properly granted summary judgment for the SBA, concluding that there was no material breach of the settlement agreement. The court held that, although the SBA employee's comment at issue could have constituted a breach because he did not simply refer the potential employer to Human Resources, the court agreed with the district court that the breach was not material because the employee's description of appellant was positive, or at worst, neutral. Accordingly, summary judgment for the SBA was affirmed.

This case stemmed from petitioner's rates filed with the Federal Energy Regulatory Commission (FERC) for its Michigan oil pipeline where petitioner agreed with two of its three shippers to restrict rate increases for a three-year moratorium period. At issue was the initial rate petitioner must use to calculate its new annual ceiling levels. Petitioner argued that after the end of the moratorium period, its ceiling levels should be calculated as if its maximum rates had been set under FERC's indexing methodology all along. In contrast, FERC would simply pick up the rates where the settlement agreement left off, using the last rate under the agreement as the initial rate for the period after the agreement. The court held that neither the agreement nor the relevant regulations clearly laid out how to determine the rates petitioner could charge now that the three-year period had past. Therefore, finding both the agreement and the regulations ambiguous, the court deferred to the reasonable views of FERC and denied petitioner's petition for review.