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The Washington Consulting Group, Inc v. Raytheon Technical Services

January 20, 2011

THE WASHINGTON CONSULTING GROUP, INC., PLAINTIFF,
v.
RAYTHEON TECHNICAL SERVICES COMPANY, LLC, AND CHARLES E. KEEGAN, DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

The Washington Consulting Group ("plaintiff") brought this suit against Raytheon Technical Services Company, LLC ("Raytheon") and its employee Charles E. Keegan (collectively, "defendants"), in the Superior Court of the District of Columbia, alleging that defendants used improper means to secure the award of a Federal Aviation Administration ("FAA") contract worth almost $1 billion. According to plaintiff, Raytheon and Keegan -- who was having an affair with a high-ranking FAA official at the time -- conspired with the FAA to structure the contract bidding process and to misuse plaintiff's proprietary information in such a way as to ensure that Raytheon, rather than plaintiff, would receive a ten-year FAA contract to train air traffic controllers. In its complaint, plaintiff asserts state common law claims for tortious interference with economic advantage, unfair competition, and misappropriation of confidential and proprietary information, as well as violations of the D.C. Uniform Trade Secrets Act, D.C. CODE ANN. § 36-401 et seq. ("DCUTSA"). On February 19, 2010, defendants removed the action to this Court pursuant to 28 U.S.C. §§ 1331 and 1441, on the ground that plaintiff's claims, while raised under state law, nonetheless "turn on substantial questions of federal law," and thus fall within the narrow category of cases over which federal courts have jurisdiction under Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005). Shortly after filing their notice of removal, defendants filed a motion to dismiss plaintiff's complaint. Plaintiff responded with a motion to remand and a request for attorneys' fees under 28 U.S.C. § 1447(c), as well as a motion to stay briefing on defendants' motion to dismiss pending resolution of the motion to remand. This Court granted plaintiff's motion for a stay, and now, for the reasons explained below, will also grant plaintiff's motion to remand, but deny its request for attorneys' fees.

BACKGROUND

The present dispute stems from Raytheon's September 2008 acquisition of a ten-year FAA contract to train air traffic controllers. Compl. ¶¶ 3, 31. Historically, the FAA's program for training air traffic controllers was separated into two parts, with newly-hired controllers first attending 2 to 4 months of training at the FAA Academy in Oklahoma City, followed by an additional 2 to 5 years of field training at local facilities across the country. Id. ¶ 19. Prior to 2006, the FAA's practice had been to award -- through competitive procedures -- one contract for its Academy training program, and a second contract for its field training program. Id. ¶¶ 19-20. Since the mid-1980s, the former contract had been awarded to the University of Oklahoma, while the latter contract had always been awarded to plaintiff. Id. ¶ 20.

In October 2005, the FAA sent out its usual bid for the field training contract, known as the Training Support for Air Traffic ("TSAT") contract. Id. ¶ 39. In keeping with its standard practice of seeking contracts with at least five-year terms, the FAA advertised the TSAT contract as having a one-year term with a four-year option, exercisable at the FAA's discretion. Id. ¶ 40. However, in November 2005, less than two weeks before the bid proposals were due, the FAA amended the TSAT contract to reduce the length of the option from four years to one. Id. ¶ 41. Plaintiff subsequently won the one-year TSAT contract with the one-year option. Id. ¶¶ 39, 44.

Then, in June 2006, the FAA announced its intent to abandon its traditional two-contract approach upon expiration of plaintiff's TSAT contract, in order to implement a new, consolidated training effort, known as the Air Traffic Control Optimum Training Solutions ("ATCOTS") program. Id. ¶¶ 21-22, 39. The FAA informed potential bidders on the ATCOTS contract that the new program would require a single contractor to "recruit, train, and hire thousands of controllers, each of whom would need two to three years of training or more, before those individuals would be hired by the FAA, thereby assigning an overwhelming risk to any contractor." Id. ¶ 22 (emphasis in original). Thus advertised, the new ATCOTS program eliminated plaintiff as a potential primary contractor, since the size and scope of the program exceeded plaintiff's capacity. Id. ¶ 24. Plaintiff therefore agreed instead to bid on the ATCOTS contract as a sub-contractor to Lockheed Martin Corporation ("Lockheed Martin"). Id. ¶¶ 24-25.

In August 2007, more than a year after it had first announced the ATCOTS program, the FAA told potential bidders that it had revised its initial conception of the project. Id. ¶¶ 27-28. Although the FAA still sought to combine the two pre-existing training contracts into one, it announced its intent to substantially downsize the ATCOTS program, so that the new ATCOTS contract would no longer require contractors to pay for the training of prospective air traffic controllers prior to their employment with the FAA. Id. ¶¶ 27-28. Plaintiff maintains that it would have been fully capable of bidding on this revised ATCOTS contract as a primary contractor had it known that such a contract was contemplated from the start, but that it was unable to do so because of its prior agreement to serve as a sub-contractor to Lockheed Martin. Id. ¶¶ 28-29. Consequently, Lockheed Martin, with plaintiff as its largest sub-contractor, submitted a bid for the revised ATCOTS contract. Id. ¶ 30. In September 2008, the FAA awarded the ATCOTS contract to Raytheon, rather than to Lockheed Martin, even though the bid submitted by the Lockheed Martin team allegedly "posted a higher technical score." Id. ¶¶ 30-31. Lockheed Martin did not thereafter file a bid protest. Id. ¶ 66.

Plaintiff, however, now contends that the FAA's decision to award the contract to Raytheon rather than to Lockheed Martin was the result of "an extensive and concerted plan" by defendants, which was "implemented through and with the assistance of high-level FAA officials with power and influence over ATCOTS." Id. ¶¶ 32, 34. According to plaintiff, defendant Keegan -- a former FAA employee who joined Raytheon in January 2006, and now serves as Raytheon's program manager for the ATCOTS project -- was having an affair with Maureen Knopes-Keegan, the FAA official in charge of ATCOTS, from the time that Keegan left the FAA in December 2005 until the couple married in August 2007. Id. ¶¶ 4, 35-37, 59; see also Pl.'s Mot. to Remand [Docket Entry 4] at 4. Knopes-Keegan played a "crucial role in the genesis of ATCOTS" at the FAA, and served as the ATCOTS program manager from June 2006 until her departure from the FAA in March 2007. Id. ¶ 59. Plaintiff maintains that, during this time-frame, Keegan and Knopes-Keegan, acting "for and on behalf of Raytheon . . . and in exchange for Raytheon's promising and providing employment to Keegan," planned and executed an elaborate scheme to prevent plaintiff from bidding on the ATCOTS contract as a primary contractor, thereby ensuring that the contract would be awarded to Raytheon. Id. ¶¶ 32, 38.

The first step allegedly taken in pursuit of this scheme was to reduce the option length on the TSAT contract -- the predecessor to the ATCOTS contract. Id. ¶ 39. Plaintiff alleges "[o]n information and belief" that the FAA official responsible for the decision to reduce the option-length of the TSAT contract was either Keegan, Knopes-Keegan, or another FAA official acting at their request. Id. ¶ 42. By reducing the option length of the TSAT contract, plaintiff argues, defendants ensured that the FAA could solicit bids for a new training contract at the end of plaintiff's shorter, two-year contract term. Id. ¶ 43. Then, by designing a program well beyond plaintiff's capacity, the FAA, acting at the direction of Keegan and Knopes-Keegan, effectively prevented plaintiff from competing for the ATCOTS contract as a primary contractor. Id. ¶¶ 4, 24, 33-34. According to plaintiff, the FAA never intended to implement the "massive overhaul of the air traffic control program" that it advertised in June 2006; rather, the June 2006 announcement was merely part of defendants' "[r]use . . . to remove [plaintiff] as the training contractor for the FAA and was the direct result of Raytheon's tortious conduct." Id. ¶ 34.

Plaintiff also accuses Knopes-Keegan of providing Keegan (and thus Raytheon) with plaintiff's trade secrets and proprietary information, which were contained in its December 2005 bid for the TSAT contract. Id. ¶¶ 44, 48. The substantial similarity between the TSAT contract and the final ATCOTS contract meant that plaintiff's TSAT bid submitted to the FAA -- which included pricing information as well as staffing and management plans -- was of "immense value" to potential ATCOTS bidders like Raytheon. Id. ¶¶ 44-46. Indeed, plaintiff contends that the trade secrets and proprietary information in its TSAT bid comprised 75% of the information that was eventually included in Lockheed Martin's bid for the ATCOTS contract. Id. ¶ 51.

Because Raytheon, acting through Keegan, had unlawfully obtained these trade secrets and proprietary information from Knopes-Keegan, it secured an unfair competitive advantage over plaintiff and Lockheed Martin in the ATCOTS bidding process. Id. ¶¶ 48-52.

Plaintiff brings three state-law claims against Raytheon and Keegan, alleging tortious interference with economic advantage (Count I), misappropriation of confidential and proprietary information (Count III), and violations of the DCUTSA (Count IV). Plaintiff also brings a fourth state-law claim for unfair competition against Raytheon only (Count II). The complaint seeks damages in excess of $1 billion as well as punitive damages in an unspecified amount. See Compl. ¶ 15; id., Prayer for Relief at 26. Despite the complaint's numerous references to "conspiracies" between Keegan and Knopes-Keegan, see Compl. ¶¶ 4, 38, plaintiff does not name Knopes-Keegan or the FAA as a defendant. Nor has plaintiff pursued traditional causes of action under government contracts theories or for Federal Trade Secrets Act ("FTSA") violations. Indeed, the only federal statutes and regulations cited in plaintiff's complaint are those pertaining to criminal conflicts of interest for government employees. See id. ¶¶ 53-64 (citing 18 U.S.C. §§ 207, 208; 5 C.F.R. § 2635.502); see also Pl.'s Reply in Supp. of its Mot. to Remand ("Pl.'s Reply") [Docket Entry 15] at 5; Defs.' Opp. to Pl.'s Mot. to Remand ("Defs.' Opp.") [Docket Entry 13] at 5. Specifically, plaintiff alleges that Keegan violated 18 U.S.C. § 207(a), that Knopes-Keegan violated 18 U.S.C. § 208(a), and that Raytheon aided and abetted Keegan and Knopes-Keegan's "criminal or regulatory conflict of interest" for its own commercial benefit. See Compl. ¶¶ 54-64, 70b, 79b. Plaintiff does not purport to sue directly for violations of these criminal statutes, but only cites the violations as evidence of defendants' alleged intentional interference with plaintiff's "valid economic expectancy," in support of its claims in Counts I and II for tortious interference with economic advantage and unfair competition. See id. ¶¶ 70b, 79b.

DISCUSSION

A party may remove a case from state to federal court only when the case could have been filed in federal court originally. Wexler v. United Air Lines, Inc., 496 F. Supp. 2d 150, 152 (D.D.C. 2007); see also Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The party seeking removal -- defendants here -- bears the burden of establishing that federal subject matter jurisdiction exists. Wexler, 496 F. Supp. 2d at 152; see also Downey v. Ambassador Dev., LLC, 568 F. Supp. 2d 28, 30 (D.D.C. 2008). Because removal from state to federal court "implicates significant federalism concerns, a court must 'strictly construe[] the scope of its removal jurisdiction.'" Steele v. Salb, 681 F. Supp. 2d 34, 36 (D.D.C. 2010) (quoting Downey, 568 F. Supp. 2d at 30). Consequently, "[w]here the need to remand is not self-evident, the court must resolve any ambiguities concerning the propriety of removal in favor of remand." Johnson-Brown v. 2200 M St. LLC, 257 F. Supp. 2d 175, 177 (D.D.C. 2003); see also Downey, 568 F. Supp. 2d at 30 (quoting Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 815-16 (4th Cir. 2004) (en banc)) (explaining that "'if federal jurisdiction is doubtful, a remand to state court is necessary'"); Wexler, 496 F. Supp. 2d at 152 ...


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