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Cartwright International Van Lines, Inc. v. Doan

December 5, 2007

CARTWRIGHT INTERNATIONAL VAN LINES, INC., ET AL., PLAINTIFFS,
v.
LURITA ALEXIS DOAN, ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION, DEFENDANT.



The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge

MEMORANDUM OPINION

This case arises out of a dispute between the General Services Administration ("GSA") and Cartwright International Van Lines ("Cartwright") and Foremost Forwarders, Inc. ("Foremost") (collectively "plaintiffs") regarding overcharges billed for plaintiffs' shipments of household goods to military bases and military airports. Pending before the Court is plaintiffs' Motion for a Preliminary Injunction and defendant's Motion to Dismiss or in the Alternative to Transfer the Case to the Court of Federal Claims. Upon consideration of the Motions, the responses and replies thereto, the applicable law, and the entire record, the Court DENIES plaintiffs' Motion for a Preliminary Injunction, DENIES Defendant's Motion to Dismiss, and GRANTS defendant's Motion to Transfer this Case. For the reasons stated herein, this case shall be transferred to the Court of Federal Claims.

I. BACKGROUND

Plaintiffs are transportation service providers ("TSPs") exclusively engaged in the forwarding of military household good shipments through a program administered by the Department of the Army's Surface Deployment and Distribution Command ("SDDC"). Am. Compl. ¶ 8. The shipments at issue in this case are known as "Code J" shipments, which involve plaintiffs' movement of household goods to and from military bases and military airports. Id. at ¶ 9. Authorized charges for those services are set forth in single factor rates (SFRs) filed by plaintiffs and other carriers with the SDDC. Id. The government periodically publishes Rate Solicitations which set forth certain additional surcharges that TSPs may "pass through" to the government. These surcharges do not apply to all shipments and are not included in the SFRs. Id. The terms of each TSP's transportation contract provides the basis for determining the correctness of its bills and whether a carrier has inappropriately billed the government for surcharges not allowed by the Solicitation. Def.'s Ex. 1, ¶ 5.

Plaintiffs and other TSPs electronically submit their bills to the Department of Defense Finance and Accounting Service ("DFAS") through an Electronic Data Interface ("EDI"). Id. Bills submitted via EDI are paid without prepayment audit or verification and are effectively paid automatically upon submission. Def.'s Mem. at 5. DFAS subsequently provides the EDI data to GSA to conduct a post-payment audit of a TSP's bills. Id.

A. Statutory and Regulatory Framework

Under the Transportation Act of 1940, the Administrator of GSA has the authority to conduct pre- or post-payment audits of transportation bills of any Federal Agency to verify their correctness. 31 U.S.C. § 3726(b). If the post-payment audit process reveals that the government has paid a carrier or freight forwarder more than the allowable rate, the government may recoup the overpayments via offsets against future amounts due to that carrier. Offsets may be imposed up to three years after the original overpayment was made. Id. § 3726(d). GSA's regulations implementing the Transportation Act authorize the agency to issue a Notice of Overcharge ("NOC") if it determines that a TSP owes the government a debt and to offset overcharges from other payments due to that TSP. Def.'s Mem. at 3. Specifically:

When GSA performs a post-payment audit, the GSA Audit Division has the delegated authority to implement the following procedures:

(a) Audit selected TSP bills after payment;

(b) Audit selected TSP bills before payment as needed to protect the Government's interest (i.e., bankruptcy, fraud);

(c)Examine, settle, and adjust accounts involving payment for transportation and related services for the account of agencies;

(d) Adjudicate and settle transportation claims by and against agencies;

(e) Offset an overcharge by any TSP from an amount subsequently found to be due that TSP;

(f) Issue a Notice of Overcharge stating that a TSP owes a debt to the agency. This notice states the amount paid, the basis for the proper charge for the document reference number, and cites applicable tariff or tender along with other data relied on to support the ...


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