TEXTAINER EQUIPMENT MANGEMENT LIMITED, ET AL. v. USA

Filing 176

UNREPORTED Order denying 94 Motion for Sanctions pursuant to Rule 37; denying 167 Motion for Reconsideration ; denying 168 Motion for Reconsideration. The Clerk is directed to enter judgment. Signed by Judge Nancy B. Firestone. (sr) Copy to parties.

In the United States Court of Federal Claims
No. 08-610C
(Filed: June 30, 2014)

TEXTAINER EQUIPMENT
MANAGEMENT LIMITED, et al.,
Plaintiffs,
v.
THE UNITED STATES,
Defendant.

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Motion for Reconsideration; RCFC 59;
Final Judgment

ORDER DENYING RECONSIDERATON AND FOR ENTRY OF JUDGMENT
Pending before the court are plaintiffs’ motions for reconsideration under Rule 59
of the Rules of the United States Court of Federal Claims (“RCFC”),1 filed May 8, 2014.2
In its first motion, plaintiff Capital Lease Limited (“Capital”) argues that the court should
reconsider its decision to deny Capital’s request to join Capital Lease GMBH (“GMBH”)
to this case after the court determined that Capital was not entitled to compensation for
containers taken by the government but belonging to GMBH. The court determined that

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Also pending before the court is plaintiffs’ motion for discovery sanctions pursuant to RCFC
37. That motion is addressed at infra, note 5.

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The court’s previous decisions include: Textainer Equiq. Mgmt. Ltd. v. United States, 115 Fed.
Cl. 708 (2014); Textainer Equip. Mgmt. Ltd. v. United States, No. 08-610, 2013 WL 1984382
(Fed. Cl. May 15, 2013); Textainer Equip. Mgmt. Ltd. v. United States, No. 08-610, 2012 WL
5465983 (Fed. Cl. Nov. 6, 2012); Textainer Equip. Mgmt. Ltd. v. United States, 105 Fed. Cl. 69
(2012); Textainer Equip. Mgmt. Ltd. v. United States, 99 Fed. Cl. 211 (2011).

Capital’s request was untimely. Plaintiff seeks reconsideration of that determination and
argues the delay in requesting joinder was caused by the government and outside of
plaintiff’s control. In its second motion, plaintiff, CAI International, INC. (“CAI”), seeks
reconsideration of the court’s earlier decision denying compensation to CAI on the
grounds that the United States took title to containers belonging to CAI as a bona fide
purchaser for value pursuant to contract and thus CAI could not establish a Fifth
Amendment taking.3 CAI argues that the government’s contract right was limited to the
acquisition of containers that were “lost” in Iraq and CAI now has evidence to show that
at least one of its containers was not “lost” and was in fact used by the United States
Navy (“Navy”). CAI argues it is entitled to compensation under the Fifth Amendment
for government use of its containers.
In response, the government argues that neither motion meets the standards for
reconsideration under RCFC 59. With regard to joining GMBH, the government argues
that plaintiff’s request under RCFC 17 comes too late because the delay in seeking
joinder was caused by the plaintiffs’ collective failure to timely and correctly identify the
actual owners of the containers and was not caused by the government. With regard to
CAI’s request for reconsideration, the government argues that the alleged new evidence
is in fact not “new” because plaintiff knew of the container before it filed its cross-motion
for summary judgment motion over a year ago. Moreover, the government argues the

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See Textainer, 2012 WL 5465983, at *11.

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information is irrelevant to the court’s holding and thus does not support reconsideration
of the court’s liability decision.
I.

STANDARD OF REVIEW
In a motion for reconsideration, the moving party must show that (a) an

intervening change in the controlling law has occurred, (b) evidence not previously
available has become available, or (c) reconsideration is necessary to prevent manifest
injustice. RCFC 59(a)(1). A party “must do more than merely reassert[] arguments
which were previously made and were carefully considered by the court.” Bannum, Inc.
v. United States, 59 Fed. Cl. 241, 243 (2003) (citations omitted). Further, a motion for
reconsideration “is not intended to give an unhappy litigant an additional chance to sway
the court.” Bishop v. United States, 26 Cl. Ct. 281, 286 (1992) (quoting Circle K Corp.
v. United States, 23 Cl. Ct. 659, 664-65 (1991)).
II.

DISCUSSION
a. The Court Declines to Reconsider Its Holding Regarding GMBH
Plaintiff, Capital, argues that the court should reconsider its holding denying

Capital’s request to join GMBH in the litigation on the grounds that the delay in moving
for joinder should be attributed to the government. Specifically, plaintiff contends that
this case was delayed during the first four years of litigation by the government’s
contention that none of the containers at issue in this case had been “taken” by the
government but were lawfully acquired under a government contract allowing the
government to take title to “lost” containers. Capital argues that after the government
learned that 125 of Capital’s containers were being used by the military the government
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changed its defense and instead argued that the government’s contract with TOPtainer
allowed the government to take title to containers “deemed” lost and that the government
was a bona fide purchaser for value of the containers upon paying TOPtainer. According
to plaintiff, ownership did not become an issue until after the government changed
positions and plaintiff was forced to show that the owners of the containers notified the
government that TOPtainer was not authorized to pass title to the government. By this
point, Capital argues its business was winding down and it had difficulty finding all of its
records. Additionally, plaintiffs argue that joinder under RCFC 17 should be liberally
granted and, further, that the government would not suffer any prejudice from joinder.
In response, the government argues that Capital has failed to establish grounds for
reconsideration. The government argues that it first raised the possibility that GMBH
was the owner of these containers in a brief filed on August 6, 2012, but that plaintiffs
maintained that the containers were owned by Capital in an affidavit submitted on
October 11, 2012. The government further contends that plaintiffs failed to provide
complete responses to requests for discovery on ownership issues until compelled to do
so by the court, in late 2013. Thus, the government argues, plaintiff is responsible for the
delay in identifying the owner of the containers.
The court agrees with the government. Capital has failed to demonstrate the
requirements necessary for reconsideration. Plaintiff has not presented any intervening
change in the law, presented any new evidence, or demonstrated that reconsideration is
necessary to prevent manifest injustice. Instead, plaintiff is seeking to re-litigate the issue
of joinder. As discussed in the opinion, the court gave plaintiffs ample opportunity to
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discover the ownership of these containers and to join all owners. Plaintiff, however,
waited until the final reply brief on its cross motion for summary judgment and after the
close of all discovery to seek to join GMBH. Although motions for joinder are liberally
granted, where delay in bringing a motion is attributable to the plaintiff’s conduct, joinder
is not mandated.4 See 6A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane,
Richard L. Marcus & Adam N. Steinman, Federal Practice and Procedure § 1555 (3d ed.)
(“when the determination of the right party to bring the action was not difficult and when
no excusable mistake ha[s] been made, then Rule 17(a)(3) is not applicable and the action
should be dismissed.”). Plaintiff has not identified a legitimate ground for
reconsideration.
b. The Court Declines to Reconsider Its Holding Regarding CAI
Plaintiff CAI argues that the court should grant reconsideration of its holding that
the government did not “take” CAI’s containers in contravention of the Fifth Amendment
based on new evidence that shows the government had been using at least one of CAI’s
containers without having paid for it. CAI contends that, on October 16, 2013, it learned
from the Navy that a CAI container, later determined to be among those at issue in this
case, was available for pickup in Gulfport, Mississippi.

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In addition, allowing joinder at this late date would prejudice the government. Specifically, the
court notes that because there is no evidence in the record to show that GMBH gave notice to the
government regarding its interest in the subject containers, it is not certain, as plaintiff assumes,
that the government would be liable for “taking” the containers owned by GMBH in any event.
See Textainer, 115 Fed. Cl. at 715-17.

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In response, the government argues the fact that one of CAI’s containers was not
lost but was in use by the Navy is not a “new” fact and is in any event irrelevant. With
regard to relevance, the government contends that the court clarified in its May 2013
decision that CAI was denied compensation on the grounds that the government was a
bona fide purchaser for value because the government did not receive timely notice of
CAI’s objections to TOPtainer’s right to transfer title. The government argues the
evidence of a container once belonging to CAI in Gulfport, Mississippi is thus irrelevant
because the government took legal title to the container when it paid TOPtainer.
Moreover, the government argues, the plaintiff knew of this evidence before filing earlier
briefs and failed to raise the evidence. Thus, the evidence is not “new.”
The court agrees with the government that the evidence is not “new” and is in any
case irrelevant. The court’s holding that the United States did not take CAI’s containers
did not depend on whether the containers were “lost” or in “use.” Rather, the court held
that because CAI did not provide timely notice to the United States that TOPtainer could
not pass title to containers owned by CAI to the government, the government obtained
title to CAI’s containers as a bona fide purchaser for value under TOPtainer’s contract
with the government. See Textainer, 2012 WL 5465983, at *11-13. Whether CAI’s
containers were actually lost or being used by the government was therefore not relevant
to the court’s holding rejecting CAI’s right to recover for its containers.5 Moreover,

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The court acknowledges that in its last opinion it held that use of the containers by the military
was relevant in response to the government’s contention that the government had committed the
tort of conversion and had not “taken” Capital’s containers. Textainer, 115 Fed. Cl. at 718. At
issue in that decision, however, was whether the government had committed a tort or had “taken”

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CAI’s argument is not timely in any event. CAI knew of this alleged new fact before it
filed its final brief on summary judgment and failed to identify the fact at that time.
Thus, the evidence presented is not “new” and cannot support reconsideration.
III.

CONCLUSION AND JUDGMENT
As plaintiffs have not established that (a) an intervening change in the controlling

law has occurred, (b) evidence not previously available has become available, or (c)
reconsideration is necessary to prevent manifest injustice, plaintiffs’ motions for
reconsideration are DENIED.
Judgment shall therefore be entered as follows: (1) for the reasons set forth in the
opinion dated November 6, 2012 (ECF No. 127) judgment is entered for the defendant,
the United States, as to the claims asserted by plaintiff Cronos Containers Limited; (2) for
the reasons set forth in the opinion dated November 6, 2012 (ECF No. 127) judgment is
entered for the defendant, the United States, as to the claims asserted by plaintiff CAI
International, Inc.; (3) for the reasons set forth in the opinion dated April 22, 2014 (ECF
No. 166), judgment is entered in part for defendant, the United States, as to certain claims
asserted by Capital Lease Limited; (4) for the reasons set forth in the opinion dated April
22, 2014 (ECF No. 166), judgment is entered in part for the plaintiff, Capital Lease
Limited, for the principal sum of $485,899.64, plus interest in the sum of $238,461.62 for

containers where the government was not a bona fide purchaser for value under a contract with
TOPtainer. In that decision the court concluded that because the government used the subject
containers it had “taken” them for its benefit and thus it had to pay for the containers under the
Fifth Amendment. In contrast, the court has held that the government was a bona fide purchaser
for value of plaintiff, CAI’s, containers. As such the government was in fact allowed to use
CAI’s containers without triggering the Fifth Amendment takings clause.

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a total judgment of $724,361.26 through May 15, 2014. Interest will accrue after May
15, 2014 at a rate equal to the Moody’s Composite Index of Yields on Aaa Long Term
Corporate Bonds Rate, compounded annually, until the judgment is paid; (5) Any claims
of the plaintiffs Textainer Equipment Management (U.S.) Limited (“Textainer”) and
Green Eagle Investments, N.V. (“Green Eagle”) are hereby DENIED and plaintiff
Textainer and plaintiff Green Eagle are hereby DISMISSED; (6) Plaintiffs’ motion for
sanctions filed March 27, 2012 (ECF No. 94) is hereby DENIED;6 and (7) All other
Claims not expressly addressed above are hereby DENIED.
IT IS SO ORDERED.

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The plaintiffs moved for discovery sanctions pursuant to RCFC 37 on March 27, 2012. In the
motion, plaintiffs sought to preclude the government from arguing that containers were “lost” on
the grounds that the government had failed to timely disclose that 122 containers belonging to
Capital were being used by the Marines in Okinawa, Japan. At the time, the parties were focused
on whether the subject containers were actually lost and thus purchased within the terms of the
TOPtainer contract.
The government argued that sanctions were not proper because the government supplemented its
responses to discovery when it learned of the Okinawa containers. Moreover, as discussed
above, the government later argued that because it was a bona fide purchaser for value of the
containers it did not matter that the government was using Capital’s containers in Okinawa.
The motion for sanctions is denied because the government took timely action to supplement its
discovery responses. The evidence establishes that the government supplemented its discovery
responses once it learned of the Okinawa containers. In addition, the plaintiffs were not
prejudiced by any delay in the government’s submission of supplemental discovery responses.
Regardless of plaintiff’s contention that title to only “lost” containers could be transferred to the
government, the court determined that Capital was entitled to recovery under the Fifth
Amendment because Capital gave timely notice to the government of its ownership interest in
the containers and thus the government was not a bona fide purchaser for value. Plaintiff Capital
is therefore being reimbursed for the subject 122 containers with interest and thus the request for
sanctions is moot.

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s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge

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