CBS CORPORATION v. USA

Filing 246

UNPUBLISHED OPINION denying 204 Motion for Partial Summary Judgment; granting 213 Motion to Dismiss - Rule 12(b)(1); granting 213 Cross Motion. Signed by Judge Nancy B. Firestone. (sf)

C B S CORPORATION v. USA

D o c . 246

In the United States Court of Federal Claims
N O T FOR PUBLICATION N o . 01-79C (F ile d : March 31, 2009) ******************* CBS CORPORATION, Plaintiff, v. T H E UNITED STATES, Defendant. ******************* * * * * * * * * * * * * *

T h o m a s A. Lemmer, Denver, CO, for plaintiff. Herbert L. Fenster and Christopher B o u q u e t, Washington, DC, Mark J. Meagher, Denver, CO and Eric J. Sobczak, Pittsburgh, P A , of counsel. D a v id D'Alessandris, U.S. Department of Justice, Washington, DC, with whom were M ich a e l F. Hertz, Acting Assistant Attorney General and Jeanne E. Davidson, Director, for d e f e n d a n t. C. Coleman Bird, U.S. Department of Justice, Washington, DC and Lawrence S . Rabyne, Defense Contract Management Agency, Manassas, VA, of counsel. R ich a rd D. Bernstein, Washington, DC, for Amicus Curiae General Electric C o m p a n y. OPINION ON MOTION TO DISMISS COUNT II OF THE AMENDED C O M P L A I N T AND CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT F I R E S T O N E , Judge. P e n d in g before the court is the motion of the defendant ("United States" or " g o v e rn m e n t" ) to dismiss Count II of the amended complaint filed by the plaintiff, CBS

Dockets.Justia.com

C o rp o ra tio n ("CBS" or "plaintiff"), pursuant to Rule 12(b)(1) of the Rules of the United S ta te s Court of Federal Claims ("RCFC").1 The parties have also filed cross-motions for s u m m a ry judgment on Count II. In Count II of CBS's complaint, CBS, the successor-inin ter e st of Westinghouse, seeks to recover from the United States a pension deficit a d ju s tm e n t for negotiated government prime contracts and subcontracts (collectively, " c o n tra c ts " ) awarded to Westinghouse's Electronic Systems Group ("ESG") prior to the e f f e c tiv e date of the original Cost Accounting Standard 413 ("CAS 413"), 48 C.F.R. § 9 9 0 4 .4 1 3 -5 0 (c)(1 2 ) (1978). In its motion to dismiss Count II and for partial summary ju d g m e n t, the government argues that CBS did not submit a claim for the subject pension d ef icit adjustment to the contracting officer. Thus, the government argues that the court d o e s not have jurisdiction over Count II of CBS's complaint because CBS did not comply w ith the exhaustion requirements of the Contract Disputes Act ("CDA"), 41 U.S.C. § 6 0 5 (a) (1997). In the alternative, the government argues that it is entitled to summary ju d g m e n t on Count II on the grounds that no law, regulation, or contract provision p rov ides for an adjustment of pension costs attributable to pre-CAS 413 contracts. In C B S ' s cross-motion for partial summary judgment, CBS argues that the court has

This is the third decision in this case. Over the course of the litigation CBS has changed names. The claims to the contracting officer were originally filed under the name of Westinghouse Electric Corporation ("Westinghouse"), which became Viacom, Inc. before commencing litigation. Viacom has since become CBS Corp. The case name was changed at the request of the plaintiff. See Viacom, Inc. v. United States, 70 Fed. Cl. 649 (2006), on reconsideration sub nom. CBS Corp. v. United States, 75 Fed. Cl. 498 (2007).

1

2

ju ris d ic tio n over Count II and that it has a right to a pension deficit adjustment for n e g o tia te d contracts that pre-date CAS 413. The court also has before it the brief of a m ic u s curiae, General Electric Company ("GE"), which was filed in support of the g o v e rn m e n t's partial summary judgment motion. For the reasons set forth below, the c o u rt finds that CBS failed to comply with the exhaustion requirements of the CDA, and th e re f o re the court does not have jurisdiction over the claim. The court also finds, in the altern ativ e, that the government is entitled to summary judgment on the merits of CBS's C o u n t II claim on the grounds that CBS has no legal right to collect deferred pension c o s ts for pre-CAS 413 contracts. BACKGROUND FACTS T h e following facts are not disputed. CBS is the successor-in-interest of W e stin g h o u s e , which did business with the government through ESG. ESG was e sta b lis h e d in 1951 and provided services for defense-related electronic systems and s u b s ys te m s until ESG's closure on December 29, 1996. From 1951 to 1978 (prior to the e f f e c tiv e date of CAS 413), ESG performed firm, fixed-price ("FFP"), fixed-price in c e n tiv e ("FPI") and cost-type contracts and subcontracts for the government. Between J a n u a ry 1, 1979 and February 29, 1996 (after the promulgation of the original CAS 413 b u t before it was revised in 1996), ESG performed FFP and cost-type contracts for the

3

g o v e rn m e n t.2 Prior to the implementation of the CAS, Westinghouse's government c o n tra c ts included the standard contract clauses in effect when the contracts were formed. It is not disputed that Westinghouse maintained two pension plans and that the g o v e rn m e n t periodically audited Westinghouse's accounting of costs associated with W e stin g h o u s e 's Qualified Pension Plan ("WPP") 3 and Westinghouse's Executive Pension P la n ("WEPP"),4 pursuant to certain clauses included in the Westinghouse contracts. The g o v e rn m e n t did not object to Westinghouse's practice of accounting for pension costs at th e time. In addition, the government does not dispute that for a period prior to the p r o m u l g a tio n of CAS 413, Westinghouse allocated pension costs to various divisions, in c lu d in g ESG, to enable each division to allocate pension costs to its contracts. Furthermore, between 1951 and 1996, Westinghouse used an accrued benefit cost method to measure and assign the cost of the WPP on a composite basis with the knowledge of th e government. During the same period, ESG also measured and assigned a composite c o s t of the WEPP using an accrued benefit cost method.

The government disputes that ESG performed FPI contracts during this period. However, this court has previously addressed this issue and determined that ESG performed FPI contracts in Viacom, Inc. v. United States, 70 Fed. Cl. 649, 653 (2006). It is not disputed that during the period of 1951 to 1996, the WPP was a defined benefits pension plan under the Internal Revenue Code ("IRC") and that effective January 1, 1975, the WPP was a qualified plan under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461 (1993). During the period of 1951 to 1996, the WEPP was a nonqualified defined benefit pension plan under the IRC and ERISA (subsequent to ERISA's enactment in 1974). 4
4 3

2

A f te r the promulgation of CAS 413, Westinghouse classified ESG as a segment f o r CAS-compliance purposes. On February 29, 1996, Westinghouse sold substantially a ll of ESG to Northrop Grumman ("Northrop"), and both the government and W e stin g h o u s e considered the sale to be a segment closing under the applicable contract p ro v is io n s and CAS 413. Pursuant to the purchase agreement between Westinghouse and Northrop, W e stin g h o u s e retained the pension assets and benefit obligations for inactive pension p a rticip a n ts. After the sale, Westinghouse no longer entered into government contracts th ro u g h ESG. At the time of ESG's sale, there existed deficits in the WPP and WEPP b e c au s e pension plan liabilities of WPP and WEPP allocable to ESG exceeded the p e n s io n plan assets of the WPP and WEPP allocable to ESG. On July 12, 1996, Westinghouse submitted a claim for payment of $134,548,886 f o r the costs related to the WPP due to the closure of ESG. On July 12, 1996, W e stin g h o u se also submitted a claim for payment of $21,867,856 for the costs related to th e WEPP due to the closure of ESG. The amount for WEPP was later revised to $ 1 5 ,6 1 9 ,6 1 8 . The claim submitted by Westinghouse for the WPP stated, "This is a claim for the p a ym e n t of $134,548,886 for all CAS-covered contracts requiring 1996 performance." Letter from James F. Davis to Thomas P. Smith regarding the WPP claim (July 12, 1996) (" W P P claim"). Westinghouse included in its WPP claim pension costs incurred from

5

E S G 's inception in 1951. CBS (the successor-in-interest of Westinghouse) concedes that its original demand for payment was based solely upon CAS 413. Ptf.'s Resp. to Def.'s P r o p o s e d Findings of Uncontroverted Fact ("Ptf.'s Resp. to DPFUF") ¶ 2.5 S im ila r ly, Westinghouse characterized its claim with regard to the WEPP as a " c la im and demand for payment of $21,867,856 under the general provisions of [CAS] 4 1 3 and specifically [CAS 413-50(c)(12),] 48 C.F.R. 9904.413-50(c)(12)[ (1995)]." 6 L e tte r from James F. Davis to Thomas P. Smith regarding the WEPP claim (July 12, 1 9 9 6 ) ("WEPP claim"). Again, Westinghouse specified that the WEPP claim was for p a ym e n t for "all CAS-covered contracts requiring 1996 performance." Id. Westinghouse in c lu d e d in its WEPP claim pension costs dating back to the inception of ESG in 1951. CBS concedes that its original demand for payment was based solely upon CAS 413. Ptf.'s Resp. to DPFUF ¶ 3.7

Ptf.'s Resp. to DPFUF ¶ 2 states, in pertinent part, "CBS admits that its claim with regard to the WPP stated that it was a `claim and demand for payment . . . under the general provisions of [CAS] 413.' CBS also admits that the claim requested payment under `all CAS-covered contracts requiring 1996 performance.'" (quoting Def.'s Proposed Findings of Uncontroverted Fact ("DPFUF") ¶ 2 (further quotation omitted)).
6

5

CAS 413-50(c)(12) states: If a segment is closed, if there is a pension plan termination, or if there is a curtailment of benefits, the contractor shall determine the difference between the actuarial accrued liability for the segment and the market value of the assets allocated to the segment, irrespective of whether or not the pension plan is terminated. The difference between the market value of the assets and the actuarial accrued liability for the segment represents an adjustment of previously-determined pension costs.

Ptf.'s Resp. to DPFUF ¶ 3 states, in pertinent part, "CBS admits that its claim with regard to the WEPP stated that it was a `claim and demand for payment . . . under the general provisions of 6

7

T h e government does not dispute that the Defense Contract Audit Agency and the D e f en s e Contract Management Agency reviewed Westinghouse's CAS 413 claims for an a d ju s tm e n t to deferred WPP and WEPP costs and did not comment upon, or take e x c ep tio n to, Westinghouse's inclusion of that portion of the pension deficit that was a llo c a b le to contracts entered into before CAS 413 became effective. Briefing on the present motions was completed on January 29, 2009. DISCUSSION I. Standards of Review A. M o tio n to Dismiss Under RCFC 12(b)(1)

T h e government has moved to dismiss Count II of CBS's complaint for lack of s u b j e c t matter jurisdiction under RCFC 12(b)(1). In reviewing a motion to dismiss, " [ f ]a c tu a l allegations must be enough to raise a right to relief above the speculative level, o n the assumption that all the allegations in the complaint are true (even if doubtful in f a ct)." Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007) (internal citations o m itte d ); see also Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir. 1997); Henke v . United States, 60 F.3d 795, 797 (Fed. Cir. 1995) ("[T]he court [is] obligated to assume all factual allegations to be true and to draw all reasonable inferences in plaintiff's f a v o r." ). See generally Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other g ro u n d s by Harlow v. Fitzgerald, 457 U.S. 800, 814-15 (1982); Reynolds v. Army & Air [CAS] 413.' CBS also admits that the claim requested payment under `all CAS-covered contracts requiring 1996 performance.'" (quoting ("DPFUF") ¶ 3 (further quotation omitted)). 7

F o r c e Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988). The plaintiff, however, bears the b u r d e n of establishing subject matter jurisdiction. Alder Terrace, Inc. v. United States, 1 6 1 F.3d 1372, 1377 (Fed. Cir. 1998) (citing McNutt v. Gen. Motors, 298 U.S. 178, 189 (19 3 6 )). See also Blueport Co., LLC v. United States, 533 F.3d 1374, 1381 (Fed. Cir. 2 0 0 8 ). The plaintiff must do so by a preponderance of the evidence. Toxgon Corp. v. B N F L , Inc., 312 F.3d 1379, 1383 (Fed. Cir. 2002) ("In a Rule 12(b)(1) motion, the p la in tif f bears the burden to show by a preponderance of the evidence that the district c o u rt has subject matter jurisdiction."); Reynolds, 846 F.2d at 748. When the government c h a llen g e s the jurisdiction of the court over the claim for relief, the plaintiff cannot rely o n mere allegations in the complaint but must come forward with relevant, competent p r o o f to establish jurisdiction. McNutt, 298 U.S. at 189; see also Banks v. United States, 3 1 4 F.3d 1304, 1310 (Fed. Cir. 2003), Alder Terrace, 161 F.3d at 1377. Because ju ris d ic tio n is a threshold matter, a case can proceed no further if a court lacks ju ris d ic tio n to hear it. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1 9 9 8 ); see also Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) ("[W]hen a federal c o u rt concludes that it lacks subject-matter jurisdiction, the court must dismiss the c o m p la in t in its entirety." (citation omitted)). See generally John R. Sand & Gravel v. U n ited States, 128 S. Ct. 750 (2008). T h is court has jurisdiction under the CDA to consider certain claims. 41 U.S.C. § 6 0 9 (1994). In particular, this court has jurisdiction to consider claims that have been

8

m a d e to a contracting officer where either a decision has been issued by the contracting o f f ic e r or the contracting officer has failed to issue a decision within the time specified by s ta tu te . Id.; see also 41 U.S.C. § 605(c)(5) (1997), England v. The Swanson Group, 353 F .3 d 1375, 1379 (Fed. Cir. 2004) ("Upon the issuance of a contracting officer's final d ec isio n on a claim, the contractor has the choice to appeal either to the appropriate board o f contract appeals or to the Court of Federal Claims."). B. C ro ss-M o tio n s for Summary Judgment

Summary judgment is appropriate when "the pleadings, the discovery and d isc lo su re materials on file, and any affidavits show that there is no genuine issue as to a n y material fact and that the movant is entitled to judgment as a matter of law." RCFC 5 6 (c )(1 ); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Casitas M u n . Water Dist. v. United States, 543 F.3d 1276, 1283 (Fed. Cir. 2008). In considering a motion for summary judgment, the court's role is not to "weigh the evidence and d e te rm in e the truth of the matter but to determine whether there is a genuine issue for tria l." Liberty Lobby, 477 U.S. at 249. "The evidence of the nonmovant is to be b e l ie v e d , and all justifiable inferences are to be drawn in his favor." Id. at 255; see also M a ts u s h ita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986); Casitas M u n . Water Dist., 543 F.3d at 1283. "As to materiality, . . . [o]nly disputes over facts that m ig h t affect the outcome of the suit under the governing law will properly preclude the e n try of summary judgment." Liberty Lobby, 477 U.S. at 248. In addition, an issue of

9

m a ter ial fact is only genuine "if the evidence is such that a reasonable [finder of fact] c o u ld return a verdict for the nonmoving party." Id. II. Count II of CBS's Complaint Must Be Dismissed for Lack of Jurisdiction. H e re , Westinghouse presented two claims to the contracting officer for a final d e c is io n . One claim was made in connection with the pension deficit associated with the W P P . The other was made in connection with the pension deficit associated with the W E P P . Both claims stated that they were submitted for payment "under the general p ro v is io n s of [CAS] 413, . . . and specifically, [CAS] 413-50(c)(12)." See WPP Claim, W E P P Claim. Based on the plain language of the claims, it is clear that CBS did not p re s e n t a separate claim for any pre-CAS 413 contracts to the contracting officer. Nonetheless, CBS argues that it did not need to make a separate claim for pre-CAS 413 c o n tra c ts because its claim for pre-CAS 413 pension costs is simply a "subset" of its CAS 4 1 3 contract claims and is based on the same underlying facts. In support of this view, C B S relies on various Court of Federal Claims and Federal Circuit cases that have re c o g n iz e d a contractor's right to modify a CDA claim, in court, where the "essence of th e claim" is based on the same operative facts of the claim presented to the contracting o f f ic e r. Pl.'s Opp'n to Def.'s Mot. Dismiss and Cross-Mot. on Count II ("Pl.'s Opp'n") a t 4-5 (citing Northrop Grumman Info. Tech., Inc. v. United States, 535 F.3d 1339, 1343 (F ed . Cir. 2008); Scott Timber Co. v. United States, 333 F.3d 1358, 1365-66 (Fed. Cir. 2 0 0 3 ); ATK Thiokol, Inc. v. United States, 76 Fed. Cl. 654, 659-60 (2007); Hardwick

10

B ro s . Co., II v. United States, 26 Cl. Ct. 884, 888 n.4 (1992), rev'd on other grounds, 72 F .3 d 883 (Fed. Cir. 1995), on remand 36 Fed. Cl. 347 (1996); Cerberonics, Inc. v. United S tates, 13 Cl. Ct. 415, 417 (1987)). In this connection, the Federal Circuit has held that a contractor "may not raise any n e w claims not presented and certified to the contracting officer." Santa Fe Eng'rs, Inc. v . United States, 818 F.2d 856, 858 (Fed. Cir. 1987) (citation omitted) (emphasis added). Under Federal Circuit law, in order to proceed, the contractor must demonstrate that it g a v e "the contracting officer a clear and unequivocal statement that gives the contracting o f f ic e r adequate notice of the basis and amount of the claim." Contract Cleaning Maint., In c . v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987) (emphasis added), (citing T e c o m , Inc. v. United States, 732 F.2d 935, 936-37 (Fed. Cir. 1984); Metric Const. Co., In c . v. United States, 1 Cl. Ct. 383, 392 (1983)). See also SMS Data Prods. Group, Inc. v. U n ite d States, 19 Cl. Ct. 612, 616-17 (1990). Tested by these standards, the court agrees w ith the government that this court does not have jurisdiction over Count II of CBS's a m e n d e d complaint. C B S argues that its pre-CAS claim is not "new" because it arises from the same set o f operative facts as its CAS 413 claims, which were based on its 1996 CAS-covered c o n tra c ts. More specifically, CBS argues that Count II involves the same operative facts a s those presented to the contracting officer, namely: (a) pension plans . . . existed during the period 1951 to 1996; (b) [government c o n tra c ts were performed] during the period 1951 to 1996; (c) pension costs 11

[ w e re ] attributable to the government contracts performed during the period 1 9 5 1 to 1996; (d) [ESG closed] in 1996; and (e) [Westinghouse had pension] d e f ic its and a prepayment credit as of closure in 1996. Pl.'s Opp'n. Br. at 5. While CBS relies on the above-cited "operative facts" to support jurisdiction, CBS g o e s on to argue on the merits of its Count II claim that its right to pre-CAS 413 pension c o sts actually turns on the existence of an "implied agreement" between the government a n d Westinghouse in which the government agreed to pay to Westinghouse any pension d e f ic it attributable to deferred pension costs under ESG's pre-CAS 413 contracts. As C B S states, Count II is "based on the fact that contracts existed between [Westinghouse] a n d the government which contained mandatory clauses supporting an implied obligation to adjust pension deficit costs and allocate those costs to a cost type contract in the year d e f erra l is no longer possible." Pl.'s Surreply at 8 (emphasis in original). CBS argues th a t the implied agreement arises from various government-approved accounting practices th a t allowed Westinghouse to defer pension payments and then claim them once the s e g m e n t was closed. Pl.'s Opp'n at 1. It is undisputed that Westinghouse did not bring a n y of these "implied obligations" to the attention of the contracting officer, nor did W estin g h o u se quantify its pre-CAS 413 claim for the contracting officer. H a v in g reviewed CBS's contentions, the court agrees with the government that C B S ' s claim for pre-CAS 413 pension costs based on an "implied agreement" was not in c lu d e d within CBS's CAS 413 claim but is, in fact, a separate claim that was never

12

su b m itte d to the contracting officer for approval. Contrary to CBS's contentions, this c o u rt finds that CBS's CAS 413 claims and pre-CAS 413 claim do not share the same b a sis . CBS's claim to post-CAS 413 pension costs is based on its 1996 CAS 413-covered co n trac ts, which by their terms incorporate the CAS 413 segment closing adjustment. In c o n tra st, CBS's pre-CAS 413 claim involves different contracts and different accounting p ra c tic e s that were not identified in the CAS 413 claims. Westinghouse did not identify f o r the contracting officer any provisions in its pre-CAS 413 contracts that would have p u t the contracting officer on notice that Westinghouse understood that it was entitled to a n adjustment of deferred pension costs at the time of the segment closing based solely u p o n those pre-CAS 413 contracts. Nor was any "implied agreement" metioned before the CO. Instead, as noted above, Westinghouse's WPP & WEPP claims to the CO were b a s e d , by their own terms, on CAS 413. See WPP Claim; WEPP Claim. Similarly, W e stin g h o u se did not provide the contracting officer with any calculation regarding its p re -C A S 413 pension cost claim. In these circumstances, Westinghouse did not give the c o n tra c tin g officer the opportunity to consider the basis or the amount of its pre-CAS 413 c la im . The Federal Circuit has made it clear that the contracting officer is entitled to a " c lea r and unequivocal statement . . . of the basis and amount of the claim" before this c o u rt may assume jurisdiction over the claim. Contract Cleaning, 811 F.2d at 592. Here, C B S failed to provide a clear and unequivocal statement of either the basis or amount of its pre-CAS pension cost claim. As such, Count II must be dismissed for lack of

13

ju ri s d ic tio n . III. The Teledyne Decision Bars CBS's Claim for a Pre-CAS Segment Closing A d ju stm en t. F o r the reasons set forth above, the court has determined that it does not have ju ris d ic tio n over Count II of CBS's complaint. However, even if the court had ju risd ictio n , Count II of CBS's complaint would nonetheless be foreclosed under wells e ttle d principles of stare decisis. In Teledyne, Inc. v. United States, 50 Fed. Cl. 155 (2001) ("Teledyne"), this court h e ld , and the Federal Circuit agreed, that any "pension surplus or deficit attributable to c o n tra c ts that pre-date the original CAS 413 [promulgated in 1978] must be excluded f ro m the CAS 413 segment closing adjustment" on the grounds that including pre-CAS 4 1 3 pension costs in a CAS 413 segment closing adjustment "would amount to a g o v e rn m e n t-m a n d a te d change in accounting practices . . . ." Teledyne, 50 Fed. Cl. at 183, 1 8 4 , aff'd sub nom Allegheny Teledyne, Inc. v. United States, 316 F.3d 1366, 1383-84 (F e d . Cir. 2003) ("Allegheny Teledyne"). This court based its holding on the fact that p rio r to promulgation of the original CAS 413 segment closing provision, the government h ad no legal basis for adjusting previously-determined pension costs authorized under a s ta n d a rd government contract. Teledyne, 50 Fed. Cl. at 184. This view was then a f f irm e d by the Federal Circuit. Allegheny Teledyne, 316 F.3d at 1383-84. Indeed, the re g u la to ry history of the original CAS 413 makes plain that the segment closing provision w a s added to ensure that when a segment closed, an adjustment would be made. As the 14

C A S Board explained in the preamble to CAS 413, "[A] problem arises in cases where a s e g m e n t is closed. Because there are no future[ accounting] periods in which to adjust p re v io u s ly-d e te rm in e d pension costs applicable to that segment, a means must be d e v e lo p e d to provide a basis for adjusting such costs. CAS 413 Preamble 12, "Closing of a segment." 42 Fed.Reg. 37,191, 37,195 (July 20, 1977) at Ex. 6 to Br. for GE as Amicus C u ria e Supporting Def. ("GE Br."). This provision of CAS 413 would not have been n e e d ed if the ability to adjust previously-determined pension costs already existed under s ta n d a rd government contract clauses. Thus, the Teledyne and Allegheny Teledyne d e c is io n s make plain that prior to promulgation of CAS 413 in 1978, there was no general a u th o rity for adjusting previously-determined pension costs at the time of a segment c lo s in g . This court is, of course, bound by this Federal Circuit precedent and cannot d e v ia te from the Circuit's ruling. Crowley v. United States, 398 F.3d 1329, 1335 (Fed. C ir. 2005) ("[T]he Court of Federal Claims may not deviate from the precedent of the U n ited States Court of Appeals for the Federal Circuit any more than the Federal Circuit ca n deviate from the precedent of the United States Supreme Court."). A lth o u g h CBS contends that general contract provisions in its pre-CAS 413 c o n tra c ts authorized and provided for a segment closing adjustment, CBS argues that it is n o t seeking to overturn the Federal Circuit's Allegheny Teledyne decision. Instead, CBS c o n te n d s that the holding in Teledyne does not preclude its present claim because "the T e le d yn e decisions did not address the issue of entitlement to pension costs under any

15

le g a l theory other than the CAS." Pl.'s Opp'n at 7. U p o n examination of the relevant opinions, however, it is clear that CBS's a rg u m e n t regarding the scope of the Teledyne decisions is based on a misreading of the th o s e decisions. More specifically, as discussed above, the decision that the CAS 413 a d ju s tm e n t did not include pre-CAS contract costs was based on the conclusion that the in c lu s io n of pre-CAS contract costs would result in an accounting change. Teledyne, 50 F e d . Cl. at 183. The Circuit adopted this reasoning in its opinion. Allegheny Teledyne, 3 1 6 F.3d at 1383-84. Therefore, the Circuit necessarily determined that there was no b a sis for a pension cost adjustment under the standard government contract provisions b e f o re the promulgation of CAS 413. Indeed, CBS's immediate predecessor-in-interest, V iac o m Inc. (which, in turn, was the successor-in-interest of Westinghouse), attempted to d is s u a d e the Circuit of this view when it filed a brief as an amicus curiae in the Federal C irc u it in the Teledyne case. In its brief, Viacom argued that prior to promulgation of the o rig in a l CAS 413, in 1978, existing accounting standards, and in particular Accounting P rin c ip les Board Opinion No. 8 ("APB-8"), required recognition of "any previously u n a m o r tiz e d actuarial gain or loss" upon a segment closing. See Br. for Viacom, Inc. as A m ic u s Curiae Supporting Appellant, Allegheny Teledyne, 316 F.3d 1366 (Nos. 02-5008, 0 2 -50 0 9 , 02-5010, 02-5011), at 18 (Ex. 3 to GE Br.). The Federal Circuit, however, re je c te d this argument when it held that CAS 413 amounted to a change in accounting p ra c tic e from the pre-CAS 413 accounting practice. Allegheny Teledyne, 316 F.3d at

16

1 3 8 3 -8 4 . This court is bound by the Circuit's ruling and is not free to now adopt a view re jec ted by the Federal Circuit.8 Thus, under traditional principles of stare decisis, this c o u rt must grant the government's motion for summary judgment. C O N C L U SIO N For the above-stated reasons, the court GRANTS the government's motion to d is m is s Count II of CBS's complaint. In the alternative, the government's motion for p a r tia l summary judgment is GRANTED. Plaintiff's motion for partial summary ju d g m e n t is DENIED. IT IS SO ORDERED. s/Nancy B. Firestone NANCY B. FIRESTONE Judge

CBS argues in its motion for partial summary judgment in the present case that APB-8 provided for an adjustment of previously-recognized pension costs upon the closure of the ESG segment without regard to CAS 413. See Pl.'s Opp'n at 9-13. This is essentially the same argument it made before the Circuit in Allegheny Teledyne. 17

8