Environmental Dimensions, Inc. v. EnergySolutions Government Group, Inc.
Filing
168
MEMORANDUM OPINION AND ORDER by District Judge Kea W. Riggs Granting 103 MOTION for Summary Judgment on EDi's Unfair Trade Practices Act Claim. (cmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
ENVIRONMENTAL DIMENSIONS, INC.,
Plaintiff,
v.
No. 1:16-cv-1056-KWR-JHR
ENERGYSOLUTIONS GOVERNMENT
GROUP, INC. (n/k/a Atkins Energy
Government Group, Inc.),
Defendant.
MEMORANDUM OPINION AND ORDER ON DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT
THIS MATTER is before the Court on Defendant’s Motion for partial Summary
Judgment on Plaintiff’s Unfair Trade Practices Act claim [Doc. 103], filed November 21, 2018.
Having reviewed the parties’ pleadings and the applicable law, the Court finds that Defendant’s
motion is well-taken and, therefore, is GRANTED.
BACKGROUND
This action arises from a dispute involving a nuclear waste remediation project the parties
worked on together at Los Alamos National Lab (“LANL”). Plaintiff is in the business of
providing environmental resources and radioactive waste management and containment support
to the U.S. Department of Energy and other government agencies. The company is managed
predominately by its Vice President, Michael Bradshaw (“Bradshaw”). Plaintiff engaged in a
bidding process for qualification to contract with Los Alamos National Security, LLC (“LANS”)
to perform transuranic waste remediation work at LANL.
Defendant’s LANS Contract: Master Task Order 10
Defendant provides nuclear waste remediation and personnel support. In 2009, two years
before contracting with Plaintiff, Defendant worked as prime contractor with LANS on a
transuranic waste remediation project designated as Master Task Order 10. The project was
completed on June 30, 2014. Plaintiff was not a party to that agreement. On February 14, 2014,
an incident occurred at the Carlsbad Waste Isolation Pilot Plant facility when an improperly
packaged waste drum, packaged by Defendant at LANL, underwent an exothermic reaction and
burst, causing a radiological release (“WIPP incident”). The DOE Accident Investigation Board
(AIB) investigated the incident and issued a report on April 15, 2015. The report pinpointed twelve
contributing factors leading to the accident, including, among other things, LANS’ failure to
adhere to certain controls implemented by the relevant field office, LANL’s failure to develop
appropriate packaging and treatment procedures, and failure of LANS, Defendant, and the Los
Alamos field office to ensure a strong enough safety culture. The report stated that Defendant’s
actions were possible contributing factors to the accident but stated that none of the contributing
factors individually caused the accident.1
Master Task Order Agreement No. 2
Unrelated to Defendant’s Master Task Order 10 project, on July 12, 2011, in pursuit of
qualification to bid on a LANL contract for small businesses, denominated as Master Task Order
Agreement No. 2 (“MTOA2”), Plaintiff executed a Teaming Agreement with Defendant,
specifying the duties and responsibilities of the parties should the bid be accepted. The Agreement
included that, “[e]xcept as expressly provided … all rights and obligations of the parties under this
Agreement shall terminate on the earliest of the following: … e. Execution by both parties of the
subcontract contemplated by this Agreement.” (Doc. 99 Ex. G).
1
The Report provides “Contributing Causes: Events or conditions that collectively with other causes increased the
likelihood or severity of an accident but that individually did not cause the accident.” (Doc. 111 Ex. 1 Page 4).
2
In February 2012, Plaintiff was qualified as a potential contractor, but no work was
assigned at the time. The LANS’ MTOA2 agreement with Plaintiff provided that “Contractor
[LANS] may, at any time, without notice to the sureties if any, by written Change Notice
unilaterally direct additions, deletions or changes . . . to all or any part of the Work and
Subcontractor agrees to perform such work as changed.” (SOF 7).
After its successful qualification, Plaintiff subcontracted with Defendant and two other
companies to carry out assigned work. Plaintiff executed the subcontract with Defendant in
August 2013. On April 16, 2014, LANS awarded Plaintiff work under MTOA2 Task Order 1,
with a maximum potential allocation of $23,349,876.42. LANS retained the right to modify this
amount.
LANS incrementally released funds for the project to Plaintiff amounting to
$4,839,421.76. Work began on the project in July 2014.
Plaintiff’s employees, project manager Chris Edgmon (“Edgmon”) and COO/VP of
business development John Rodell (“Rodell”)2 were tasked with coordinating the work. Edgmon
was responsible for managing the project on a day-to-day basis by scheduling work, budgeting,
and approving invoices submitted by the subcontractors, which in turn were submitted to Rodell
for review and approval. Bradshaw had little involvement in the day-to-day operations of the
project, and most decisions were largely left to Edgmon and Rodell.
Defendant took on a larger role than the other subcontractors in performance of the work,
consequently billing for a larger share than the other subcontractors. It is undisputed that
Defendant only carried out work authorized by Plaintiff; that Defendant submitted six invoices
dating from March 10 - August 11, 2015 amounting to $1,057,354.63, for which it was not paid;
and that Plaintiff submitted invoices to LANS for the same work and received payment. On May
It is unclear what Rodell’s exact title is, but the record reflects that Edgmon deferred to him and he made final
decisions regarding the project on a day-to-day basis.
2
3
12, 2015, Bradshaw sent a letter of cure to Defendant stating Defendant was not in compliance
with the terms of the Teaming Agreement and that “[i]n spite of repeated attempts by EDi to realign
the staffing to meet the TA [Teaming Agreement] goals, EnergySolutions continued refusal has
forced us to take action… [i]f this matter is not resolved by Friday May 15, 2015, any work [going
forward] performed by EnergySolutions above and beyond 35% is done so solely at
EnergySolutions’ risk.” (Doc. 111 Ex. 2). After Bradshaw’s letter, Plaintiff continued to assign
work to Defendant, which it performed until LANS terminated the underlying Task Order by letter
on May 27, 2015, stating that “[t]he TRU waste program has reduced the scope and budget for
SSR activities this fiscal year and for the next two fiscal years. As a result, the current and long
term scope included in EDi’s Task Order 275074 will be removed in full with the exception of the
warehousing leasing applicable to this removed scope of work.” (SOF 16).
LEGAL STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue
of material fact. See Shapolia v. Los Alamos Nat’l Lab., 922 F.3d 1033, 1036 (10th Cir. 1993)
(citations omitted). Once the moving party meets its initial burden, the nonmoving party must
show that genuine issues remain for trial “as to those dispositive matters for which it carries the
burden of proof.” Applied Genetics Int’l Inc. v. First Affiliated Secs., Inc., 912 F.2d 1238, 1241
(10th Cir. 1991) (citation omitted).
A fact is material if it could have an effect on the outcome of the suit. Smothers v. Solvay
Chems., Inc., 740 F.3d 530, 538 (10th Cir. 2014). A dispute over a material fact is genuine if the
evidence presented could allow a rational jury to find in favor of the nonmoving party. EEOC v.
4
Horizon/CMS Heathcare Corp., 220 F.3d 1184, 1190 (10th Cir. 2000). A court is to view the facts
in the light most favorable to the non-moving party and draw all reasonable inferences in favor of
that party. Shero v. City of Grove, 510 F.3d 1196, 1200 (10th Cir. 2007). A court cannot weigh the
evidence and determine the truth of the matter, but instead determines whether there is a genuine
issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986).
“[A] complete failure of proof concerning an essential element of the nonmoving party’s
case necessarily renders all other facts immaterial,” and thus, the moving party is entitled to
judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
DISCUSSION
I.
Preliminary Matter: Local Rule 7.1
For the same reasons advanced by the Court in its prior Memorandum Opinion and Order
(Doc. 155), the Court rejects Plaintiff’s argument that summary judgment should be denied due to
Defendant’s alleged procedural violation of Local Rule 7.1 for failure to confer with Plaintiff prior
to submission of this motion.
II.
Unfair Trade Practices Act
A.
Parties’ Assertions
Plaintiff claims that Defendant violated the New Mexico Unfair Trade Practices Act
(UPA), alleging that through “discussions and meetings” Defendant was aware of issues with its
waste packaging procedures as early as September 2011, but failed to inform Plaintiff of possible
negative outcomes associated with these problems; that Plaintiff did not disclose the extent of
Defendant’s involvement in the WIPP incident after executing the Teaming Agreement; that
Defendant breached its duty under the Teaming Agreement in failing to keep Plaintiff apprised of
the ongoing investigation; and that it concealed Defendant’s potential liability for over a year
5
before MTOA2 Task Order 1 was terminated. Plaintiff attributes LANS’ choice to perform more
work internally as a punitive measure in response to Defendant’s alleged misconduct during the
WIPP incident.
Lastly, Plaintiff states that Defendant used “heavy-handed tactics” and
“overruled” Plaintiff’s managerial staff to manipulate the contract to monopolize work to the
exclusion of the other subcontractors.
Defendant asserts, inter alia, that Plaintiff does not establish the requisite elements of a
claim under the UPA, particularly because Defendant could not have known or warned Plaintiff
of any issues, before executing the Teaming Agreement, since the WIPP incident occurred after
Plaintiff and Defendant’s agreement; that Defendant did not conceal or misrepresent its
involvement in the WIPP incident, but rather kept Plaintiff informed of the proceedings; that
LANS had the power to reduce or terminate the work as it saw fit and chose to exercise the option
without regard to Defendant’s involvement in the WIPP incident; and, that Defendant only
performed work it was authorized to do.
B.
Analysis
The Court is unconvinced that Plaintiff has demonstrated a violation under the UPA.
Plaintiff has not pointed to cognizable evidence that Defendant misrepresented or obscured its
involvement in the WIPP incident. Nor has Plaintiff shown that LANS terminated the contract
due to Defendant’s work on Task Order 10, or that Defendant violated the Teaming Agreement in
performing a larger share of the work on MTOA2 than the other subcontractors.
1. Law Regarding The Unfair Trade Practices Act
“The UPA provides individual and class action remedies for unfair, deceptive, or
unconscionable trade practices.” Bhasker v. Kemper Cas. Ins. Co., 361 F. Supp. 3d 1045, 1136–
37 (D.N.M. 2019). Generally, the UPA is designed to protect from “misleading identification and
6
false or deceptive advertising.” Id. (citing Lohman v. Daimler-Chrysler Corp., 2007-NMCA-100,
¶ 22, 166 P.3d 1091, 1096). In Dollens v. Wells Fargo Bank, N.A. (2015-NMCA-096, ¶ 14, 356
P.3d 531, 537), the Court provided that establishing a successful claim under the UPA requires a
showing that
(1) the defendant made an oral or written statement, a visual description or a
representation of any kind that was either false or misleading; (2) the false or
misleading representation was knowingly made in connection with the sale, lease,
rental, or loan of goods or services in the regular course of the defendant's business;
and (3) the representation was of the type that may, tends to, or does deceive or
mislead any person. (internal citations omitted).
See Stevenson v. Louis Dreyfus Corp., 1991-NMSC-051, ¶ 13, 811 P.2d 1308, 1311; Eisert v.
Archdiocese of Santa Fe, 2009-NMCA-042, ¶ 26, 207 P.3d 1156, 1164.
2. The WIPP Facility Incident
Plaintiff claims that Defendant violated the UPA and breached the terms of the Teaming
Agreement by misrepresenting the extent of its involvement in the WIPP incident, and that it knew
as early as September 2011 that there were issues with its packaging procedures. Plaintiff points
to the determinations of the AIB Report as the evidentiary basis for these contentions. Plaintiff’s
reliance upon the results of AIB report is misplaced; there is nothing within that indicates
Defendant engaged in discussions regarding improper packaging as early as September 2011, or
that it knew or should have known of packaging issues.
The Court finds Plaintiff’s argument unavailing that Defendant should have notified
Plaintiff of alleged misconduct during its earlier work for LANL, prior to entering into an
agreement with Plaintiff, given the timing of the WIPP incident, which occurred on February 14,
2014, approximately three years after the parties entered into the Teaming Agreement and six
months after the subcontract.
Plaintiff has not shown that Defendant misrepresented its
involvement in waste packaging procedures leading to the WIPP incident prior to signing the
7
Teaming Agreement. Plaintiff’s employees directly involved with the MTOA2 project testified
that no misrepresentations were made by Defendant at the time of entering into the Teaming
Agreement or the subcontract, and that Defendant did not attempt to obscure its involvement after
the WIPP incident but was in fact cooperative. (SOF 27-28). Edgmon confirmed that the parties
maintained open dialogue regarding the ongoing investigation. (Doc 99. Ex. C 193:6-18).
Moreover, Edgmon and Rodell both testified that Defendant offered to withdraw as subcontractor
following the WIPP incident to avoid potential complications for Plaintiff (SOF 29-30). Plaintiff’s
conclusory denials in its Opposition do not point to contradictory facts. Plaintiff’s opposition,
arguing that Defendant may have offered to withdraw to Rodell but not to anyone with authority
at EDi is disingenuous since Rodell was designated by Bradshaw as the authority on all day-today aspects of the project. (Doc. 99 Ex. A 22:4-12).
The record is devoid of evidence of misleading statements made by Defendant or
misrepresentations regarding its involvement in the WIPP incident that would tend to mislead
Plaintiff, as would be required under the UPA. Plaintiff’s assertion that Defendant knew of
potential liability over a year before MTOA2 Task Order 1 was terminated is equally unsupported.
See Sinfuego v. Curry County Bd. of County Commissioners, 360 F. Supp. 3d 1177, 1225 (D.N.M.
2018) (“When opposing parties tell two different stories, one of which is blatantly contradicted by
the record, so that no reasonable jury could believe it, a court should not adopt that version of the
facts for purposes of ruling on a motion for summary judgment”). The section of the AIB report
Plaintiff relies upon does not stand for this proposition but rather highlights the timeline and scope
of AIB’s investigation (Doc. 111 Ex. 3). For the foregoing reasons, Plaintiff has not established
the elements of a violation under the UPA, and summary judgment is warranted.
8
3. LANS Decision to Self-Perform Work
Plaintiff admits that LANS decided to self-perform much of the contemplated work (SOF
15) but claims LANS elected to do so, and ultimately terminated the MTOA2 contract, because of
dissatisfaction with Defendant’s performance on Master Task Order 10. In support, Plaintiff refers
the Court to Exhibit 2, which is Bradshaw’s letter of cure sent to Defendant on May 12, 2015.
This letter is wholly unrelated to LANS termination of the project work. Presuming Plaintiff
intended to direct the Court to LANS’ May 27, 2015 letter of termination, nothing therein indicates
the decision was in retribution for Defendant’s prior work, and a subsequent letter from LANS to
the Plaintiff’s President categorically denies this assertion. (Doc. 99 Ex. Y, Z). Additionally, both
Edgmon and Rodell testified that LANS personnel informed them that Defendant was not an issue.
(Doc. 99 Ex. C 146:16-25, 147: 10-14; Ex. D 197:8-25-198:1). Plaintiff’s subsequent attempt in
its Opposition to qualify its employees’ testimony again inappositely points to Exhibit 2,
Bradshaw’s unrelated May 12 letter of cure.
Plaintiff next seeks to refute Defendant’s contention that it was not guaranteed any work
under the contract.
However, the “Additional Material Facts” Plaintiff relies upon in its
Opposition do not reference this issue at all, and is contrary to Plaintiff’s admission that LANS
had authority to make changes and reductions to any allocation of work or funds under the contract
at any time (SOF 7), as well as Rodell’s testimony to that effect (Doc. 99 Ex. D 208:2-21).
4. Defendant’s Share of Labor
Plaintiff’s claim that Defendant breached a duty under the UPA by monopolizing the work
to the exclusion of other subcontractors has no basis under the statute and is also rebutted by a
plain reading of the Teaming Agreement. As an initial matter, the terms of the Teaming Agreement
expressly state that it terminates upon signing of the subcontract (Doc. 99 Ex. G). Regardless,
9
both the Teaming Agreement and subcontract provide that Defendant is entitled to “a minimum of
35% of the labor.” Plaintiff repeatedly acknowledges that the 35% was a minimum threshold
guarantee (Doc. 99 Ex. C 77:22-78:1; Ex. A 69:3–9, 69:20–70:2) but argues that Defendant
utilized heavy-handed tactics, overruled management and refused to transfer employees to
reallocate the work between the subcontractors. Plaintiff also states that Bradshaw’s letter was
effectively a stop work order, and Defendant did not stop working or transfer employees as
directed.
Plaintiff fails to bolster these allegations with any supporting contract provision or other
evidence. Vague, conclusory statements that Defendant employed heavy-handed tactics are
insufficient to defeat a motion for summary judgment. See Langley v. Adams Cty., Colo., 987 F.2d
1473 (10th Cir. 1993) (nonmovant “must identify sufficient evidence which would require
submission of the case to a jury”; Elephant Butte Irr. Dist. of New Mexico v. U.S. Dept. of Interior,
538 F.3d 1299, 1305 (10th Cir. 2008) (Fed.R.Civ.P.56 requires that party opposing motion for
summary judgment must set out specific facts showing a genuine issue for trial). Additionally,
Edgmon testified, and Bradshaw confirmed, that Defendant only performed work it was authorized
to do. (Doc. 99 Ex. C 125:20–126:14; Ex. B 64:5–11).
Plaintiff proffers Bradshaw’s letter and email communication between Rodell and
Defendant’s employee in which Defendant appears to resist requests to reduce or transfer
additional staff. However, Edgmon testified that Defendant always complied with transfer
requests (Doc. 99 Ex. C 157:17–22); Bradshaw acknowledged that Defendant was not
contractually required to redistribute staff (Doc. 99 Ex. FF 71:16–73:6, 76:7–10); and, as
previously stated, Plaintiff continued to assign work to Defendant after the letter (Doc. 99 Ex. C
154:4–25). Accordingly, Plaintiff has failed to establish essential elements of a violation under
10
the UPA or to demonstrate a genuine dispute of material fact. See Celotex Corp. v. Catrett, 477
U.S. 317, 322–23 (1986).
CONCLUSION
Plaintiff’s arguments are not borne out by the facts. Viewing the evidence in the light most
favorable to Plaintiff, there are no genuine issues of material fact such that summary judgment
should be denied.
THEREFORE,
IT IS ORDERED that Defendant’s Motion for Summary Judgment (Doc. 103) on
Plaintiff’s Unfair Trade Practices Act claim is hereby GRANTED.
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?