The Court of Appeals for the Federal Circuit reversed a sanctions order issued by the Court of Federal Claims against a Department of Justice attorney for making misleading statements regarding the status of an awardee’s performance during the pendency of a protest, where the record does not support a finding that the attorney intentionally made any misrepresentations to the trial court.
During a bid protest in the Court of Federal Claims, Level 3 Communications LLC challenged the Defense Information Systems Agency’s award of a contract to lease a telecommunications circuit between Kuwait and Germany. The contract consisted of two phases, with Phase 1 being circuit development and Phase 2 being the 60-month lease term.
At the time Level 3 filed its protest, as well as in several oral and written statements, the government attorney stated that “performance” would not begin until December 1, and that the awardee would only engage in preparing the circuit for performance. When the trial judge learned in November that the awardee had completed the circuit ahead of schedule and had begun the 60-month lease term, the court ordered the government to show cause why the government’s representations that performance would not begin until December 1 did not violate Court of Federal Claims Rule 11(b) governing sanctions.
The court found that the government attorney’s conduct did not merit Rule 11 sanctions. However, the court ruled that the government and the government attorney violated the duty of candor to the court. The court also stated that the attorney’s supervisor was authorized to impose any further sanctions against the attorney. The government and the attorney appealed the sanctions order, arguing that the trial court abused its discretion in imposing sanctions.
The Court of Appeals for the Federal Circuit held that the lower court abused its discretion in imposing sanctions. The court noted that the government informed the lower court on several occasions that the awardee continued to perform Phase 1 of the contract and did not expect to move to Phase 2 until December. It was when the lower court learned that the awardee had begun Phase 2 early, and that the government had not informed the lower court, that the lower court became concerned with the veracity of the government’s statements.
The Federal Circuit agreed that the government’s failure to notify the lower court was troublesome, but did not merit sanctions. Specifically, the court found no indication that the government attorney’s representations were intentionally false or misleading. The Federal Circuit held that the record did not support the imposition of sanctions and reversed the lower court’s sanctions order.
The government and sanctioned-party appellant Robert C. Bigler are represented by William Ernest Havemann, Chad A. Readler, and Scott R. McIntosh of the United States Department of Justice.
