PERATON INC. v. USA

Filing 25

UNREPORTED OPINION AND ORDER denying 14 Motion to Dismiss - Rule 12(b)(1) and (6) filed by USA. Signed by Judge Philip S. Hadji. (idb) Service on parties made.

In the United States Court of Federal Claims
PERATON, INC.,
Plaintiff,
No. 23-1539
(Filed: May 10, 2024)

v.
THE UNITED STATES,
Defendant.

Steven M. Masiello, Gale M. Monahan, Sean D. G. Camacho, Dentons US LLP, Denver, Colorado
and Dallas, Texas, for Plaintiff.
A. Bondurant Eley, Senior Litigation Counsel, Martin F. Hockey, Jr., Deputy Director, Patricia
M. McCarthy, Director, Commercial Litigation Branch, Brian M. Boynton, Principal Deputy
Assistant Attorney General, Civil Division, United States Department of Justice, Washington,
D.C., for Defendant.
OPINION AND ORDER
Plaintiff Peraton, Inc. brings this four-count Complaint seeking damages of $33 million
(plus interest) against the U.S. Office of Personnel Management (OPM), under the Contract
Disputes Act, 41 U.S.C. § 7101 et. seq, alleging breach of an end-user license agreement (Count
I) and breach of contract (Count II) for permitting 2.2 million limited-use license users to use
Peraton’s proprietary Electronic Official Personnel Folder (eOPF) software without paying fees
for annual maintenance services. Compl. ¶¶ 1, 53-69 (ECF 1). In the alternative, Peraton alleges
OPM breached an implied-in-fact contract (Count III) or that OPM’s actions constitute a Fifth
Amendment taking (Count IV). Compl. ¶¶ 70-97. Before the Court is Defendant’s Motion to
Dismiss (MTD) Counts I through III of the Complaint pursuant to Court of Federal Claims Rule
12(b)(6),1 as well as to dismiss Count III pursuant to Rule 12(b)(1).2 ECF 14.
Rule 12(b)(6) permits the Court to dismiss an action for failure to state a claim upon which
relief may be granted. Dismissal is proper under Rule 12(b)(6) “when a complaint does not allege
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Court of Federal Claims Rules 12(b)(6) is the same as Federal Rule of Civil Procedure 12(b)(6). Compare RCFC
12(b)(6) with Fed. R. Civ. P. 12(b)(6).
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In the alternative, the Defendant also seeks summary judgment on Counts I through III, MTD at 1, 13, and cites the
legal standard for summary judgment under Rule 56(a) of the Court of Federal Claims in the Standard of Review
section of its brief. MTD at 6-7. However, the Government does not provide any separate argument for summary
judgment. Accordingly, the Court does not separately address the Government’s alternate request for summary
judgment, but has considered it, and finds it, inter alia, premature. The Court also notes that while it only discusses
the Defendant’s main arguments for dismissal for Counts I through III, it has considered all of them.

facts that show the plaintiff is entitled to the legal remedy sought.” Steffen v. United States, 995
F.3d 1377, 1379 (Fed. Cir. 2021). The Court “must accept as true all the factual allegations in the
complaint and … must indulge all reasonable inferences in favor of the non-movant.” Fishermen’s
Finest, Inc. v. United States, 59 F.4th 1269, 1274 (Fed. Cir. 2023) (quoting Conti v. United States,
291 F.3d 1334, 1338 (Fed. Cir. 2002)). To survive a challenge pursuant to Rule 12(b)(6), a plaintiff
must plead more than “labels and conclusions” or “a formulaic recitation of the elements of a cause
of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555. “Factual allegations must be enough to
raise a right to relief above the speculative level.” Id.
The Government argues that Count I of the Complaint, breach of contract for the e.POWER
End-User License Agreement (EULA),3 fails to state a claim on which relief can be granted. MTD
at 7-10. The Government’s main argument is that because Peraton did not identify any Government
representative having actual authority to bind the United States or attach the EULA to the
Complaint, it “failed to plead, or even suggest, an agreement entered into by a Government
representative.” MTD at 8. The Court disagrees. The Government’s argument is essentially a
demand for an additional pleading requirement—to allege the identity of a Government official
with authority to bind the Government—which is not required. See Avue Techs. Corp. v. Sec’y of
Health & Hum. Servs., 96 F.4th 1340, 1345 (Fed. Cir. 2024) (noting, in a dispute involving a
software license, that the “obligation to actually prove the existence of such a contract does not
arise until the case proceeds to the merits”). To have a valid claim for breach of contract, a plaintiff
must show: (1) a valid contract between the parties; (2) an obligation or duty arising out of the
contract; (3) a breach of that duty; and (4) damages caused by the breach. Peanut Wagon, Inc. v.
United States, 167 Fed. Cl. 577, 602 (2023) (citing San Carlos Irrigation & Drainage Dist. v.
United States, 877 F.2d 957, 959 (Fed. Cir. 1989)). The Court finds that the Complaint adequately
alleges these four elements to establish breach of contract claim for the EULA. First, the Complaint
alleges a valid contract existed between the parties. Compl. ¶ 54. Second, the Complaint alleges
the contract required the Government to continue purchasing software maintenance services in
connection with the Government’s use of its e.POWER licenses. Compl. ¶¶ 55-56. Third, the
Complaint alleges a breach of the Government’s duty when it stopped paying for the software
maintenance services in 2018. Compl. ¶¶ 57-58, 61. Lastly, the Complaint alleges damages in the
total amount of $33 million (plus interest). Compl. at 13-14. Collectively, these facts indicate that
Plaintiff properly pled a breach of contract claim in Count I of the Complaint.
Similarly, the Government argues that Count II of the Complaint, breach of the 2016
Contract (Task Order No. OPM3216F0029 under General Services Administration Schedule
Contract No. GS-35F-4506G), fails to state a claim because a change to the contract was not made
by an official with authority to bind the Government. MTD at 10-12. As Peraton points out in its
Response, the allegations in Count II go beyond “formulaic recitations of the elements of the cause
of action” and detail sufficient facts upon which Peraton can establish each element of a breach of
contract claim. Twombly, 550 U.S. at 555; see also Claude Mayo Constr., 132 Fed. Cl. at 637-38
(“[G]overnment’s hyper-technical argument, which faults Claude Mayo for not using [a specific
word] in its amended complaint … is irreconcilable with the principle that reasonable inferences
must be drawn in favor of the non-moving party in the context of a motion to dismiss.”). Count II
alleged the parties entered into a valid contract, the 2016 Contract, and the Government breached
the terms of the 2016 Contract. See Compl. ¶¶ 25-27. As such, the Court finds that Peraton
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e.POWER is the name of the underlying software that runs eOPF. Compl. ¶ 9.

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sufficiently pled a breach of contract claim in Count II of the Complaint. See Peanut Wagon, Inc.,
167 Fed. Cl. at 602.
Regarding Plaintiff’s alternate legal theory in Count III, breach of an implied-in-fact
contract, the Government argues, similar to before, that Plaintiff has failed to identify a specific
official with authority to enter into an implied-in-fact contract. MTD at 12-13. However, the
existence of a binding implied-in-fact contract, like an express contract, is a non-jurisdictional
issue to be decided on the merits. See Avue Techs. Corp, 96 F.4th at 1345 (“[A] party need only
allege, non-frivolously, that it has a contract (express or implied) with the federal government.”).
Accordingly, Plaintiff’s alternate legal theory in Count III may proceed to discovery.
Finally, with respect to Count III, the Government also moves to dismiss it on the basis
that the Court lacks jurisdiction to provide relief in quantum meruit under an implied-in-fact
contract theory. MTD at 13. The Court disagrees. The Court may compensate a contractor on a
quantum valebant or quantum meruit basis “[w]here a benefit has been conferred by the contractor
on the government in the form of goods or services, which it accepted.” United Pac. Ins. Co. v.
United States, 464 F.3d 1325, 1329-30 (Fed. Cir. 2006). “The contractor is not compensated under
the contract, but rather under an implied-in-fact contract.” Id.
For the reasons stated above, the Defendant’s Motion to Dismiss is DENIED.
IT IS SO ORDERED.

s/ Philip S. Hadji
Philip S. Hadji
Judge

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