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Bollinger Shipyards Lockport, L.L.C. v. Huntington Ingalls Incorporated

United States District Court, E.D. Louisiana

January 5, 2015

BOLLINGER SHIPYARDS LOCKPORT, L.L.C., Plaintiff,
v.
HUNTINGTON INGALLS INCORPORATED, Defendant.

ORDER AND REASONS

SUSIE MORGAN, District Judge.

Before the Court is Defendant Huntington Ingalls's motion for transfer of venue.[1] The Court has reviewed the briefs, [2] the record, and the applicable law, and now issues this order and reasons.

BACKGROUND

In the 1990s, the United States Coast Guard sought proposals for a "Deepwater Program" to upgrade its fleet. It eventually awarded the prime contract to Integrated Coast Guard Systems ("ICGS"), a joint venture between Lockheed Martin Corporation and Defendant Huntington Ingalls, Incorporated ("HI"). ICGS then subcontracted with HI for many components of the work. HI in turn sub-subcontracted with Bollinger Shipyards Lockport, LLC ("Bollinger") to convert a number of the Coast Guard's 110-foot vessels to 123-foot vessels. Bollinger completed work on eight vessels and had begun work on another four when HI terminated the relationship.

In October of 2008, Bollinger filed suit in the United States District Court for the Eastern District of Louisiana against HI seeking to compel arbitration of various claims arising out of the sub-subcontract, which the parties have taken to referring as the "termination claim" (for HI's allegedly wrongful termination of the sub-subcontract with Bollinger to overhaul 49 vessels), the "COMDAC claim" (for Bollinger's extra costs associated with adding a command display and control integrated navigation system that HI designed and allegedly departed from the original scope of work), and the "Open Items claim" (for unpaid invoices as detailed in R. Doc. No. 94-1, Exhibit B). A different section of this Court granted Bollinger's motion to compel arbitration, concluding that it was "for the arbitrator to determine the scope of the arbitration clause in the first instance" and advising that if any claims were not arbitrable, "the parties may return to this Court for further proceedings."[3] In particular, the order and reasons noted that the potential applicability of the Contract Disputes Act ("CDA"), 41 U.S.C. §§ 601-613, was implicated only through contractual incorporation and not by the terms of that Act itself.[4]

The parties conducted extensive arbitration proceedings, including fourteen days of hearings. The arbitrator issued findings in which he first decided the question of arbitrability. The arbitrator held that two of Bollinger's claims (the termination claim and the COMDAC claim) fell within the scope of the narrow arbitration provision, which allowed arbitration of claims arising from "the late delivery of information or equipment by [HI], ICGS, or Lockheed Martin."[5] But the arbitrator also held that the remainder of Bollinger's claims (the Open Items claims)[6] were not within the scope of the arbitration provision.[7]

Following arbitration, the parties returned to this Court. The parties asked the Court to confirm the arbitrator's partial award limited to the termination and COMDAC claims, which it did on January 31, 2012.[8] On February 2, 2012, HI filed a motion to dismiss Bollinger's remaining, non-arbitrable Open Items claims pursuant to Rule 12(b)(6).[9] The motion stated HI "reserve[d] the right to seek a transfer to the forum to which the parties agreed" if the Court did not rule in its favor.[10] While the motion to dismiss was still pending, the matter was reassigned to this section of the Court.[11]

On June 28, 2013, this Court converted HI's motion to dismiss into a motion for summary judgment under Rule 12(d) of the Federal Rules of Civil Procedure.[12] Rule 12(d) states: "If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56."[13] The Court found both parties had substantially relied on "matters outside the pleadings." After converting the motion, the Court gave both parties "a reasonable opportunity to present all the material that is pertinent to the motion."[14]

The Court ruled on HI's converted motion on September 24, 2013.[15] The Court granted HI's motion for summary judgment insofar as it concerned Bollinger's nonarbitrable Open Items claims for more than $100, 000.[16] The Court found the arbitrator already had decided that the Open Items claims were not arbitrable because they "are clearly caused by actions or inactions of the Coast Guard over which [HI] has no control."[17] Thus, per the sub-subcontract, Bollinger was required to pursue its Open Items claims through the CDA process. The Court found Bollinger had failed to comply with the certification requirement contained in the CDA and granted HI's motion for summary judgment as to those claims.[18] Because the certification requirement did not apply to claims of $100, 000 or less, the Court denied the motion for summary judgment insofar as it concerned Open Items claims for $100, 000 or less.[19] The Court also denied summary judgment on claims based on a payment guarantee by HI.[20]

On October 7, 2013, Bollinger filed a motion for interlocutory certification to the Fifth Circuit under 28 U.S.C. § 1292(b).[21] On October 25, 2013, HI filed a motion for reconsideration of the Court's September 24, 2013 ruling with respect to claims of $100, 000 or less and claims based on a payment guarantee by HI, or, in the alternative, for transfer of venue.[22] HI did not ask for reconsideration of the Court's grant of summary judgment in its favor with respect to the Open Claims over $100, 000. Before the briefing on HI's motion was completed, however, this Court granted Bollinger's motion for interlocutory certification on November 8, 2013.[23] The Court also stayed proceedings in the case and administratively closed it pending completion of proceedings in the Fifth Circuit.[24] On February 14, 2014, the Fifth Circuit denied Bollinger's petition for permission to appeal, and the case was reopened on February 20, 2014.[25] On March 12, 2014, HI filed its renewed motion for reconsideration, or, in the alternative, for transfer of venue.[26] The Court denied Defendant HI's motion for reconsideration on November 14, 2014 but deferred ruling on HI's motion to transfer.[27]

HI contends the sub-subcontracts between HI and Bollinger contain an unambiguous forum-selection clause, and the matter should be transferred the United States District Court for the Southern District of Mississippi, the court the parties originally agreed would be the exclusive venue for suits arising from the subsubcontracts.[28] Bollinger responds that HI waived its right to challenge venue in this district because it sought affirmative relief from this Court.[29]

LAW AND ANALYSIS

In 2013, the Supreme Court clarified in Atlantic Marine Construction Co., Inc. v. U.S. District Court for the Western District of Texas that the proper procedure for enforcing a valid forum-selection clause is a motion to transfer under § 1404(a).[30] In HI's February 2, 2012 motion to dismiss pursuant to Rule 12(b)(6), which the Court converted into a motion for summary judgment, HI requested dismissal rather than a transfer under § 1404(a).[31] It was not until HI's October 25, 2013 motion for reconsideration of this Court's ruling denying in part its motion for summary judgment that HI asked in the alternative for a transfer ...


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