In Securiforce Int’l Am., LLC v. United States, No. 16-2589 (Fed. Cir. Jan. 17, 2018), the United States Court of Appeals for the Federal Circuit examined whether the trial had had properly ruled upon the issues presented in a motion for discovery sanctions brough by a vendor in a breach of contract case against the federal government.
In September 2011, Plaintiff Securiforce entered into a requirements contract with the Government to deliver fuel to eight sites in Iraq. On September 26, shortly after the contract was executed, the Government terminated the contract for reason of convenience with respect to two of the eight fuel sites (the “termination for convenience”). (Because Securiforce intended to supply fuel from Kuwait, the Government concluded that delivery to those two sites without an appropriate waiver would have violated the Trade Agreements Act of 1979 and that obtaining a waiver would have taken too long.)
The Government terminated the remainder of the contract for default regarding those two sites on November 15 (the “termination for default”). Securiforce filed its initial complaint in the Claims Court the following year, on November 6, 2012, requesting declaratory relief, asserting that the termination for default was improper.
Securiforce sought sanctions with respect to several purported failures by the Government to comply with Securiforce’s discovery requests. First, Securiforce asserted that the Government delayed in identifying and turning over documents related to other vendors and contracts awarded under the same job solicitation as the one by which Securiforce was hired. Second, after the Government initially denied that any fuel had been delivered to the Securiforce sites by vendors other than Securiforce during the duration of the subject contract, the Government stated that it had conducted further investigation and ascertained that such deliveries had in fact been made. Finally, the witness designated by the government for a Rule 30(b)(6) deposition was not capable of answering all of the questions asked by Securiforce’s counsel. The Government later offered additional witnesses for deposition, however, Securiforce declined the offers.
The trial court had denied each request for sanctions, citing to various subsections of Rule 37. The Appellate Court observed that each of subsection of Rule 37 contains exceptions that vest substantial discretion in the trial judge to determe whether sanctions are appropriate. The Appellate Court then went on to describe the protracted history of the discovery in the case, and the often contentious, and difficult relationship between the parties regarding the exchange of discovery. The Appellate Court then determined that Securiforce ultimately received the information it sought, and had declined the opportunity to depose additional witnesses when such opportunity was offered by the Government. The Appellate Court found no abuse of discretion in the Claims Court’s finding that there were no grounds upon which base an award of discovery sanctions, and affirmed the trial court’s ruling.