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Phillips v. Spencer

United States District Court, District of Columbia

July 15, 2019

SEBASTIAN PHILLIPS, et al., Plaintiffs,
v.
RICHARD V. SPENCER, [1]Secretary of the Navy, et al., Defendants.

          MEMORANDUM OPINION

          EMMET G. SULLIVAN UNITED STATES DISTRICT JUDGE

         Plaintiff Sebastian Phillips (“Mr. Phillips”), a Naval Architect, and his architecture and engineering firm, Plaintiff Marine Design Dynamics, Inc. (“MDD”), allege that they have been effectively debarred from future government contracts with the United States Department of the Navy since 2011. Plaintiffs sued the Secretary of the Navy, the Chief and Deputy Chief of Naval Operations, and four officials of the Naval Sea Systems Command (“NAVSEA”) and Operational Logistics Integration Program (“OPLOG”) (collectively, the “Federal Defendants”). Plaintiffs contend that the Federal Defendants violated the Fifth Amendment to the United States Constitution by blacklisting MDD from government contracting without due process. The Federal Defendants deny these allegations, listing several contracts and government work awarded by the Navy to MDD as proof against any alleged de facto debarment. Plaintiffs do not dispute that MDD received more than $14 million in contracts, purchase orders, delivery orders, and funding modifications between 2011 and 2016. Rather, Plaintiffs argue that they were de facto debarred from competing for OPLOG work and Military Sealift Command (“MSC”) work. Plaintiffs also assert common-law tort claims against four former MDD employees and two Navy officials.

         Pending before the Court are the parties' motions: (1) the Federal Defendants' Renewed Motion to Dismiss, or in the alternative, for Summary Judgment as to Counts I, II, and IX; (2) Plaintiffs' Motion for Partial Summary Judgment as to Count I; (3) the parties' cross-motions for summary judgment as to Counts VI and VIII against Defendant Matthew Miller (“Mr. Miller”); and (4) Plaintiffs' Motion for Entry of Order for Summary Judgment. Upon careful consideration of the parties' submissions, the applicable law, and the entire record, the Court concludes that: (1) Plaintiffs have not met the high standard of proving de facto debarment, and Defendants Charles Traugh (“Mr. Traugh”) and Michael Bosworth (“Mr. Bosworth”) are entitled to qualified immunity; (2) Plaintiffs' tort claims against Defendant William Robinson (“Mr. Robinson”) and Mr. Traugh fall under the Federal Tort Claims Act; (3) Plaintiffs have not met their burden of demonstrating that Mr. Robinson and Mr. Traugh were acting outside the scope of their employment; thus, the United States will be substituted as the defendant as to the tort claims asserted against Mr. Traugh and Mr. Robinson pursuant to the Westfall Act; (4) the United States has not waived its sovereign immunity for the tort claims against Mr. Robinson and Mr. Traugh; (5) the undisputed facts demonstrate that Mr. Miller did not breach his fiduciary duty owed to MDD; and (6) Plaintiffs' civil conspiracy claim as to Defendant Miller fails as a matter of law. Accordingly, the Court GRANTS the Federal Defendants' Renewed Motion to Dismiss, or in the alternative, for Summary Judgment as to Counts I, II, and IX, and DENIES Plaintiffs' Motion for Partial Summary Judgment as to Count I. The Court DENIES AS MOOT Plaintiffs' Motion for Entry of Order for Summary Judgment. Finally, the Court GRANTS Defendant Miller's Motion for Summary Judgment as to Counts VI and VIII, and DENIES Plaintiffs' Motion for Summary Judgment as to Counts VI and VIII.

         I. Background

         The Court assumes the parties' familiarity with the factual background and the long history of this litigation, which are set forth in the Court's two prior opinions. See Phillips v. Mabus, 894 F.Supp.2d 71 (D.D.C. 2012) (“Phillips I”); see also Phillips v. Mabus, 319 F.R.D. 36 (D.D.C. 2016) (“Phillips II”). The following facts-drawn from the parties' submissions-are undisputed, except where indicated.

         A. MDD's Work for the Navy

         In 2005, Mr. Phillips, a Naval Architect, formed MDD. Am. Compl., ECF No. 42 at 4 ¶ 6.[2] MDD is a Naval architecture and marine engineering firm based in the District of Columbia. See, e.g., Phillips I, 894 F.Supp.2d at 77. Mr. Phillips serves as MDD's president and chief executive officer. Fed. Defs.' Statement of Material Facts Not in Genuine Dispute (“SOMF”), ECF No. 88 at 3 ¶ 2. The firm specializes in ship energy conservation, and it primarily serves as a government contractor and subcontractor for the Navy and its components. Phillips I, 894 F.Supp.2d at 77-78; see also Def. Miller's Opp'n, ECF No. 133 at 1-2 (noting that MDD's website lists contracts valued at more than $44 million).[3] Relevant here is MDD's government contracting work under a subcontract with Computer Sciences Corporation (“CSC”) and a contract with the MSC.

         1. MDD and CSC Subcontract

          Between 2006 and 2011, MDD was one of the subcontractors for CSC, see Am. Compl., ECF No. 42 at 6 ¶ 23, and CSC was one of the contractors supporting the Navy's OPLOG. Fed. Defs.' SOMF, ECF No. 88 at 4 ¶ 10. The Navy, through its SeaPort-e program, awarded CSC a contract to provide support services to NAVSEA.[4] Decl. of Robert C. Beaubien (“Beaubien Decl.”), ECF No. 88-1 at 2-3 ¶¶ 2-3. Under that contract, CSC and MDD entered into “a firm-fixed price, indefinite-delivery, indefinite quantity [sub]contract under which MDD provided services only when it received a task order from CSC to do so.” Id. at 3 ¶ 4. In turn, MDD subcontracted AirClean Technologies, Inc. (“AirClean”), a company based in Seattle, Washington, to assist MDD with its work under the CSC-MDD subcontract. Decl. of Sebastian Phillips (“Phillips Decl.”), ECF No. 94-1 at 3 ¶¶ 13-15. The period of performance for the CSC-MDD subcontract commenced on June 18, 2009 and ended on April 4, 2014. Fed. Defs.' Ex. B, ECF No. 88-2 at 12.

         As CSC's senior program manager, Robert C. Beaubien (“Mr. Beaubien”) was CSC's contract monitor for MDD, and his duties consisted of, inter alia, managing its subcontractors' performance and payments under CSC's contract with NAVSEA. Fed. Defs.' SOMF, ECF No. 88 at 4 ¶ 11. The CSC-MDD subcontract provided that “CSC [was] under no obligation to issue any Task Orders” to MDD. Fed. Defs.' Ex. B, ECF No. 88-2 at 6. It also stated that “[t]he value for services to be provided by [MDD] will be specified in each Task Order” and that “in no way obligates CSC to award Task Orders under this Agreement . . . .” Id. at 5.

         Based on NAVSEA's instructions, CSC distributed the OPLOG work to subcontractors like MDD. See Beaubien Decl., ECF No. 88-1 at 3 ¶ 5. Mr. Beaubien oversaw MDD's services to OPLOG. Fed. Defs.' SOMF, ECF No. 88 at 4 ¶ 11. OPLOG's program manager, Mr. Traugh, contacted Mr. Beaubien regarding the OPLOG work, and Mr. Traugh provided “informal” guidance on how CSC should distribute the OPLOG work. Beaubien Decl., ECF No. 88-1 at 3 ¶ 5. In 2011, Mr. Traugh “directed all OPLOG projects, including those which Plaintiffs were subcontractors to, and coordinated directly with the Navy.” Pls.' SOMF, ECF No. 107 at 5 ¶ 13. Mr. Traugh and NAVSEA's chief technology officer, Mr. Bosworth, had the authority to manage the programs concerning OPLOG's relationship with Plaintiffs. See, e.g., id. at 5 ¶ 12; Fed. Defs.' Mot. to Dismiss, ECF No. 88 at 40 n.25 (citing Phillips I, 894 F.Supp.2d at 86 n.5).

         On behalf of MDD, Mr. Phillips submitted a monthly package of status reports and invoices to Mr. Beaubien, and Mr. Beaubien sent MDD's package to OPLOG's program manager, Mr. Traugh, for his approval. Fed. Defs.' SOMF, ECF No. 88 at 9 ¶ 33. Mr. Traugh and OPLOG's assistant program manager, Mr. Robinson, managed OPLOG's funding, planned the expenditures of those funds for various tasks, and assigned certain tasks to MDD. Id. at 9 ¶¶ 31-32. MDD's three employees-Defendants Michael Mazzocco (“Mr. Mazzocco”), Volker Stammnitz (“Mr. Stammnitz”), and William Muras (“Mr. Muras”)-performed the OPLOG work, and they discussed task assignments with Mr. Traugh and Mr. Robinson. See Fed. Defs.' SOMF, ECF No. 88 at 9 ¶ 34.

         Prior to fiscal year 2012, after receiving an e-mail from Mr. Phillips in April 2011 about the status of a “new task” order for OPLOG work, Mr. Beaubien responded that the task was under “[c]ompliance [r]eview.” Id. at 5 ¶ 14. Mr. Beaubien also stated that Mr. Traugh “wants me to reduce [MDD's] allocation by $700[, 000]” in order “to fund these other new start-ups.” E-mail from Mr. Beaubien, CSC, to Mr. Phillips (Apr. 13, 2011), Pls.' Ex. G, ECF No. 42-1 at 58. In May 2011, CSC issued MDD a task order modification for OPLOG work in the amount of $1, 707, 522, noting that it reflected a “$700, 000 deobligation underway.” Fed. Defs.' SOMF, ECF No. 88 at 5-6 ¶ 17. In June 2011, CSC issued MDD another task order modification for OPLOG work in the amount of $1, 192, 522, which established the final funding for fiscal year 2011. Id. at 6 ¶ 18. CSC disbursed the remainder of the $700, 000 reallocation to its own employees and other subcontractors, such as Gryphon Technologies and D&K Engineering. Beaubien Decl., ECF No. 88-1 at 5 ¶ 7.

         From March 2011 to June 2011, MDD's three senior-level employees who worked on OPLOG projects under the CSC-MDD subcontract resigned from the firm. E.g., Pls.' SOMF, ECF No. 107 at 6 ¶¶ 15-16, 7 ¶ 22; Pls.' SOMF, ECF No. 113 at 5 ¶¶ 5, 7; Am. Compl., ECF No. 42 at 5-6 ¶¶ 15-16, 6 ¶ 17. In March 2011, Mr. Mazzocco, MDD's Vice President of Operations, departed the firm to work as an independent subcontractor, see Pls.' SOMF, ECF No. 107 at 6 ¶ 16, and he eventually started his own company, Alytic, Inc., that performed OPLOG work, Beaubien Decl., ECF No. 88-1 at 5 ¶ 7. Mr. Stammnitz left his position as MDD's Vice President of Systems Engineering in June 2011, and Mr. Muras left his position as MDD's Director of Energy Programs, Financial Analysis and Planning in that same month. See Am. Compl., ECF No. 42 at 5-6 ¶¶ 16-17. In August 2011, CSC hired Mr. Stammnitz and Mr. Muras to perform OPLOG work. Beaubien Decl., ECF No. 88-1 at 5 ¶ 8.

         Before their departures and at some point in May 2011, “the Navy arranged for a multi-day meeting in Boston[, ]” Massachusetts “to discuss the OPLOG energy conservation program . . . .” Def. Muras' Answer, ECF No. 80 at 9 ¶ 68. MDD's two employees-Mr. Stammnitz and Mr. Muras-and MDD's former employee- Mr. Mazzocco-attended the meeting with the Navy officials.[5] An email states that Mr. Bosworth of NAVSEA directed OPLOG's program manager, Mr. Traugh, to end the contract with MDD. Mem. from Steven R. Southard, NAVSEA (July 19, 2011), Pls.' Ex. D, ECF No. 42-1 at 48 (“Southard Memorandum”). That directive was memorialized in a memorandum:

On 13 July 2011, during a review of the Operational Logistics Program, in the presence of Mr. Greg Doerrer, Mr. William Robinson, and me, Mr. Michael Bosworth directed Mr. Charles Traugh to terminate the contract of [MDD] and not to resume it in Fiscal Year 2012. This action is due to reasons discussed at the meeting.

Id. Soon thereafter, litigation ensued.

         After the filing of this lawsuit, Plaintiffs and the Federal Defendants agreed and stipulated to a consent preliminary injunction, requiring, among other things, “the Navy to allow MDD to compete for new work and to continue performing contracts it was currently performing under the same standards applicable to other contractors.” Phillips I, 894 F.Supp.2d at 78. As a result, the Navy appointed an OPLOG employee as a technical point of contact between CSC and OPLOG so that MDD could receive OPLOG work under the CSC-MDD subcontract. Id. at 78, 90-92. In December 2011, counsel for the Navy issued a memorandum, stating that “the Court's [O]rder require[s] all personnel of this Command to . . . neither encourag[e] nor interfer[e] with: (1) the efforts of MDD to obtain work from prime contractors; or (2) prime contractors' decisions whether or not to subcontract with MDD.” Mem. from Sophie A. Krasik, Counsel, U.S. Dep't of the Navy (Dec. 16, 2011) (footnote omitted), Pls.' Ex. K, ECF No. 54-3 at 18; see also Fed. Defs.' SOMF, ECF No. 88 at 7 ¶ 24. At Plaintiffs' request, the Navy eventually appointed Mr. Doerrer, an OPLOG employee, as the technical point of contact for any OPLOG work because Plaintiffs had not charged him with any wrongdoing. Phillips I, 894 F.Supp.2d at 90-92.

         2. MSC Contract

         In November 2009, MDD entered into a contract with the Navy as the prime contractor for MSC's energy conservation program.[6]Pls.' SOMF, ECF No. 107 at 5 ¶ 11. That contract provided for a one-year term with options to renew through November 2012. Phillips I, 894 F.Supp.2d at 77; see also Fed. Defs.' Ex. G, ECF No. 88-7 at 3. In October 2011, MSC ultimately exercised the second and final option, extending the contract with MDD to November 1, 2012. Fed. Defs.' Ex. G, ECF No. 88-7 at 2-3; see also Fed. Defs.' SOMF, ECF No. 88 at 6 ¶¶ 21-22.

         Prior to that renewal, an MSC employee who worked with MDD forwarded Mr. Phillips an e-mail from a NAVSEA employee. See Email from Thomas Martin, NAVSEA, to René Fry, MSC (Sept. 15, 2011), Pls.' Ex. R, ECF No. 42-1 at 79 (“Martin E-mail”). It states that “my boss [Mr.] Bosworth has dictated that no funding be sent to MDD in support of OPLOG in FY12. Apparently there was a problem with tracking the money. The work itself was fine.” Id. In October 2011, the same MSC employee forwarded Mr. Phillips another e-mail from the same NAVSEA employee, which states that “I have been directed by my leadership to not be involved with any contract that includes MDD. Therefore, I cannot be the [technical point of contact].” E-mail from Thomas Martin, NAVSEA, to René Fry, MSC (Oct. 7, 2011), Pls.' Ex. S, ECF No. 42-1 at 80. Nonetheless, MSC issued a contract modification to MDD on October 31, 2011. Fed. Defs.' SOMF, ECF No. 88 at 6 ¶ 22.

         Between 2012 and 2014, MDD avers that it submitted seven bids for competitive solicitations for contracts with the Navy and MSC, and that MDD was awarded one of those contracts after it filed a post-award protest. Pls.' SOMF, ECF No. 107 at 10 ¶ 36. Following MDD's protest of MSC's refusal to issue a solicitation as a “single-award, small-business set-aside, ” id. at 9 ¶ 32, the Government Accountability Office (“GAO”) and the Small Business Administration (“SBA”) concluded that MSC did not adequately perform market research to determine if the solicitation should have been set aside for small businesses, id. at 9 ¶ 33. In May 2013, the MSC Ombudsman Report concluded that MSC did not give MDD a “fair opportunity to compete for this government contract award . . . .” Id. at 10 ¶ 35; see also Pls.' Ex. E, ECF No. 107-5 at 2-7.

         Despite MDD's setbacks in government contracting with MSC, MSC awarded MDD an indefinite-delivery, indefinite quality contract with a maximum value of more than $2 million in September 2012. Fed. Defs.' Reply, ECF No. 104-1 at 6. In June 2013, MSC awarded MDD a task order under MDD's SeaPort-e contract with NAVSEA. Id.; see also Def. Miller's Opp'n, ECF No. 123 at 14. Additionally, MDD received a task order from MSC on May 23, 2014, and MSC awarded MDD another task order on the same day. Def. Miller's Opp'n, ECF No. 123 at 14-15.

         3. MDD's Contracts from the Navy and Its Components

         MDD has continued to receive work and funds from the Navy over the course of this litigation. Beginning in 2011, the Navy and its components awarded MDD new contracts, contract options, modifications, task orders, and payments. See, e.g., Fed. Defs.' SOMF, ECF No. 88 at 5, 7 ¶¶ 16, 23, 25-26; Fed. Defs.' Reply, ECF No. 104-1 at 5-6. MDD also received work from MSC and OPLOG's parent activity. See Fed. Defs.' Opp'n, ECF No. 124 at 5-10 (listing work awarded to MDD from November 2013 to July 2016). On August 21, 2014, MDD was awarded a NAVSEA contract in the amount of $14, 483, 912.86. Fed. Defs.' Notice to the Court, ECF No. 118 at 1; see also Def. Miller's Opp'n, ECF No. 123 at 14.[7] On that same day, MDD received work under a contract from the Naval Surface Warfare Center, Carderock Division-OPLOG's parent activity. Fed. Defs.' Opp'n, ECF No. 124 at 6-7.

         B. MDD and Defendant Matthew Miller

         In February 2010, MDD hired Mr. Miller, and he performed OPLOG and MSC work as a Marine Engineer until his resignation in July 2011. See, e.g., Pls.' SOMF, ECF No. 113 at 5 ¶¶ 6-7; Decl. of Matthew Miller (“Miller Decl.”), ECF No. 123-1 at 1 ¶¶ 1-2, 2 ¶ 6; Am. Compl., ECF No. 42 at 6 ¶ 18. Most of Mr. Miller's work at MDD consisted of providing engineering and program management services to MSC's Energy Conservation Program. Def. Miller's SOMF, ECF No. 87 at 15 ¶ 5. Mr. Miller devoted a small percentage of his time to the CSC subcontract, providing services to OPLOG. Id. at 15 ¶ 6. His work included creating MDD's Statement of Work (“SOW”) for OPLOG work. See Miller Decl., ECF No. 123-2 at 3 ¶ 17; see also Pls.' SOMF, ECF No. 113 at 7-8 ¶¶ 22-23.

         Mr. Miller was an “at-will” employee who never signed MDD's employee handbook (the “MDD Employee Handbook”).[8] See Def. Miller's Mot. for Summ. J., ECF No. 87 at 8; see also Miller Decl., ECF No. 98 at 4 ¶ 3. Mr. Miller admits that he signed the “Terms and Conditions of Employment, ” which contains a confidentiality provision. Def. Miller's Reply, ECF No. 99 at 6; see also Pls.' Ex. 1, ECF No. 113-1 at 2 (“[W]hile serving as a MDD employee, we request that you not assist any person or organization in competing with MDD, in preparing to compete against MDD or in hiring any employees away from MDD.”).

         During his employment with MDD, Mr. Miller and Mr. Mazzocco, at some point in 2010, created two versions of a PowerPoint presentation for the formation of a new company. E.g., Miller Decl., ECF No. 123-2 at 2 ¶ 6; Pls.' SOMF, ECF No. 113 at 6 ¶¶ 12-13. The new company aimed to provide energy conservation products to prospective partners in the industry. Pls.' Ex. H, ECF No. 94-8 at 21; see also Pls.' Ex. G, ECF No. 94-7 at 15. The first version was a business proposal for “East Coast Energy Engineering, ” and the revised version was a business proposal for “East Coast Energy Management, Inc.” Compare Pls.' Ex. H, ECF No. 94-8 at 1, with Pls.' Ex. G, ECF No. 94-7 at 1. Both versions listed the “Government” and “Commercial” as bullet points for the new company's “Long Term (1 Year)” goals. Compare Pls.' Ex. H, ECF No. 94-8 at 6, with Pls.' Ex. G, ECF No. 94-7 at 6.

         Touting the education and work experience of Mr. Miller and Mr. Mazzocco, the revised version of the business proposal (the “Proposed Business Plan”) states that the new company will be “founded by two graduates from United States Military and Merchant Marine Academies. [Mr. Miller and Mr. Mazzocco] have over 20 years of engineering experience and have been applying [their] skills to reducing the U.S. Navy's fuel consumption.” Pls.' Ex. H, ECF No. 94-8 at 21. The Proposed Business Plan estimates that forty hours per week would be devoted to MDD, and a total of fifty-six hours per week would be spent on the new company. Id. at 11. The new company never operated as a business enterprise or generated any revenue. Suppl. Decl. of Matthew Miller (“Miller Suppl. Decl.”), ECF No. 100-1 at 1 ¶¶ 2-3.

         At MDD, Mr. Miller worked with Mr. Mazzocco, Mr. Stammnitz, and Mr. Muras. While Mr. Mazzocco, Mr. Stammnitz, and Mr. Muras attended the meeting in Boston in May 2011 with the Navy officials, Mr. Miller did not attend that meeting because he was working on an assignment for MDD. Miller Decl., ECF No. 123-2 at 2 ¶ 11. After resigning from MDD in July 2011, Mr. Miller worked for AirClean for four months, and AirClean solicited CSC to work as a subcontractor for Merrill-Dean Consulting, Inc. (“Merrill-Dean”), based on Merrill-Dean's pre-existing contract with CSC. See Miller Decl., ECF No. 98 at 6 ¶¶ 16-18; see also Pls.' SOMF, ECF No. 113 at 7 ¶ 21. At some point, Mr. Miller drafted a SOW for AirClean to provide services to CSC, relying on a version of MDD's SOW for OPLOG work from the bidding process. See, e.g., Pls.' SOMF, ECF No. 113 at 7 ¶¶ 22-23; Miller Decl., ECF No. 123-2 at 3 ¶ 17. As an AirClean employee, Mr. Miller did not perform any work for MSC, Def. Miller's SOMF, ECF No. 87 at 16 ¶ 19, and he left AirClean in December 2011, id. at 16 ¶ 21.

         In January 2012, CSC hired Mr. Miller, and he worked there before joining MSC. Beaubien Decl., ECF No. 88-1 at 5 ¶ 8. Mr. Miller worked as a Mechanical Engineer at CSC from January 2012 until March 2012. Pls.' SOMF, ECF No. 113 at 8 ¶ 27. On March 12, 2012, he accepted a position at MSC as a Mechanical Engineer. Miller Decl., ECF No. 123-2 at 3 ¶ 20; see also Def. Miller's SOMF, ECF No. 87 at 17 ¶ 25.

         C. Procedural History

         On November 16, 2011, Plaintiffs filed the present action against seven Navy officials and four former MDD employees. See generally Compl., ECF No. 1. Following a hearing on Plaintiffs' emergency motions for a temporary restraining order and preliminary injunction, the Court granted the parties' Stipulated Preliminary Injunction on December 7, 2011. Phillips I, 894 F.Supp.2d at 76; Order, ECF No. 30 (Dec. 7, 2011). Under the terms of the Stipulated Preliminary Injunction, the Federal Defendants were enjoined from taking any actions to implement, enforce, or spread to any federal agency the de facto debarment of Plaintiffs from government contracting. Phillips I, 894 F.Supp.2d at 88-89.

         On January 3, 2012, Plaintiffs filed the Amended Complaint, asserting nine claims against the eleven defendants. See Am. Compl., ECF No. 42 at 29-49 ¶¶ 99-199. Count I asserts that the Federal Defendants violated Plaintiffs' constitutional right to due process under the Fifth Amendment by blacklisting them from government contracting without procedural safeguards, and it seeks declaratory and injunctive relief. Id. at 29-34 ¶¶ 99-121. Count II asserts the same claims against Mr. Traugh and Mr. Bosworth in their individual capacities and it seeks damages of $2.5 million. Id. at 34-35 ¶¶ 122-26. Counts III-VIII assert breach of fiduciary duty and civil conspiracy claims against Mr. Mazzocco, Mr. Stammnitz, Mr. Muras, and Mr. Miller, and a common-law defamation claim against Mr. Mazzocco. Id. at 35-46 ¶¶ 127-92. Count IX alleges common-law interference with contractual relations by Mr. Traugh and Mr. Robinson in their official and individual capacities. Id. at 47-49 ¶¶ 193-200.

         On September 30, 2012, the Court denied the following motions: (1) the Federal Defendants' motion to dismiss, or in the alternative for summary judgment, (2) Plaintiffs' motion to enforce the Stipulated Preliminary Injunction, and (3) the motions to dismiss filed by Mr. Mazzocco, Mr. Stammnitz, and Mr. Muras. Phillips I, 894 F.Supp.2d at 76. After the parties engaged in settlement discussions and limited discovery on the issues relevant to Counts II and IX, the parties did not reach a resolution. Phillips II, 319 F.R.D. at 37.

         Thereafter, the parties engaged in full rounds of briefing on the pending motions: (1) Plaintiffs' motion for partial summary judgment as to Count I, see generally Pls.' Mot. for Partial Summ. J., ECF No. 107; (2) the Federal Defendants' renewed motion to dismiss, or in the alternative, for summary judgment as to Counts I, II, and IX, see generally Fed. Defs.' Renewed Mot. to Dismiss or, in the Alt. for Summ. J. (“Fed. Defs.' Mot. to Dismiss”), ECF No. 88; and (3) Plaintiffs' Motion for Entry of Order for Summary Judgment, see generally Pls.' Mot. for Entry of Order for Summ. J., ECF No. 132. Mr. Miller and Plaintiffs filed cross-motions for summary judgment as to Counts VI and VII. See Def. Miller's Mot. for Summ. J., ECF No. 87; see also Pls.' Mot. for Summ. J., ECF No. 113.[9] These motions are ripe and ready for the Court's adjudication.

         II. Legal Standard

         A. Motion to Dismiss under Rule 12(b)(1)

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) “presents a threshold challenge to the Court's jurisdiction, ” and thus “the Court is obligated to determine whether it has subject-matter jurisdiction in the first instance.” Curran v. Holder, 626 F.Supp.2d 30, 32 (D.D.C. 2009) (citation and internal quotation marks omitted). “It is to be presumed that a cause lies outside [a federal court's] limited jurisdiction, ” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), unless the plaintiff can establish by a preponderance of the evidence that the Court possesses jurisdiction, see, e.g., United States ex rel. Digital Healthcare, Inc. v. Affiliated Comput., 778 F.Supp.2d 37, 43 (D.D.C. 2011) (citation omitted). Thus, the “plaintiff's factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim.” Id. (citation and internal quotation marks omitted)).

         A motion to dismiss for lack of jurisdiction may be presented as either a facial or factual challenge. Achagzai v. Broad. Bd. of Governors, 170 F.Supp.3d 164, 173 (D.D.C. 2016). “A facial challenge attacks the factual allegations of the complaint that are contained on the face of the complaint, while a factual challenge is addressed to the underlying facts contained in the complaint.” Al-Owhali v. Ashcroft, 279 F.Supp.2d 13, 20 (D.D.C. 2003) (citation and internal quotations marks omitted). When a defendant makes a facial challenge, the Court must accept the allegations contained in the complaint as true and consider the factual allegations in the light most favorable to the non-moving party. Erby v. United States, 424 F.Supp.2d 180, 182 (D.D.C. 2006). With respect to a factual challenge, the Court may consider materials outside of the pleadings to determine whether it has subject matter jurisdiction over the claims. Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

         B. Motions for Summary Judgment under Rule 56

         Under Federal Rule of Civil Procedure 56, “[t]he court shall grant summary judgment 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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The movant “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp., 477 U.S. at 323 (internal quotation marks omitted). “To defeat summary judgment, the non-moving party must ‘designate specific facts showing that there is a genuine issue for trial.'” James Madison Project v. CIA, 344 F.Supp.3d 380, 386 (D.D.C. 2018) (quoting Celotex Corp., 477 U.S. at 324).

         In ruling on cross-motions for summary judgment, the court shall grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed. See Citizens for Responsibility & Ethics in Wash. v. U.S. Dep't of Justice, 658 F.Supp.2d 217, 224 (D.D.C. 2009) (citation omitted); see also James Madison Project, 344 F.Supp.3d at 386 (“A dispute is ‘genuine' only if a reasonable fact-finder could find for the non-moving party; a fact is ‘material' only if it is capable of affecting the outcome of the litigation.” (citations omitted)). The Court “analyzes the underlying facts and inferences in each party's motion in the light most favorable to the non-moving party.” James Madison Project, 344 F.Supp.3d at 386 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)).

         III. Analysis

         As stated by Plaintiffs, the “crux of this lawsuit” is whether Plaintiffs have been de facto debarred from competing for any OPLOG and MSC work. Pls.' Surreply, ECF No. 109 at 3; see also Pls.' Opp'n, ECF No. 101 at 21 (“MSC has implemented the de facto debarment and has refused to allow MDD to be awarded or perform any new contracts.”) (emphasis added).[10] In moving for summary judgment as to Counts I and II, [11] the Federal Defendants argue that Plaintiffs cannot establish de facto debarment with respect to the OPLOG and MSC work, and that, without a showing of de facto debarment, there is no violation of their constitutional rights to due process under the Fifth Amendment. See Fed. Defs.' Mot. to Dismiss, ECF No. 88 at 16. For the reasons explained below, the Court agrees with the Federal Defendants.[12]

         Next, the Federal Defendants move to dismiss Count IX-the tort claims asserted against Mr. Traugh and Mr. Robinson-for lack of jurisdiction on four grounds: (1) those claims fall under the Westfall Act, 28 U.S.C. § 2679, id. at 36-37; (2) the evidence shows that both federal employees were acting within the scope of their employment during the alleged incidents, and the United States should be substituted as the sole defendant as the Federal Tort Claims Act (“FTCA”) does not authorize suits against federal officials, id. at 37-42; (3) Plaintiffs have failed to exhaust their administrative remedies before bringing a lawsuit under the FTCA, id. at 42-44; and (4) the United States has not waived its sovereign immunity for the FTCA claims, id. at 44-47. For the reasons explained below, the Court agrees with the Federal Defendants.[13]

         Finally, Mr. Miller moves for summary judgment with respect to Counts VI and VIII, arguing that he did not breach his fiduciary duty owed to MDD because he had a right to compete with MDD after his resignation, and that Plaintiffs' failure to demonstrate that he breached his fiduciary duty means that Plaintiffs cannot establish his liability under a theory of civil conspiracy. See generally Def. Miller's Mot. for Summ. J., ECF No. 87. The Court agrees.

         The Court examines each motion separately, first considering the alleged de facto debarment, next considering the tort claims asserted against Mr. Robinson and Mr. Traugh, and concluding with the torts claims asserted against Mr. Miller.

         A. The Federal Defendants Are Entitled to Summary Judgment as to Count I (De Facto Debarment); Mr. Bosworth and Mr. Traugh Are Entitled to Summary Judgment as to Count II (Violation of Clearly Established Rights)

         In the first round of briefing, Plaintiffs argue that genuine issues of material fact exist as to Count I and II, see Pls.' Opp'n, ECF No. 101 at 5-6, because, inter alia: (1) Plaintiffs have continued to be effectively debarred from receiving OPLOG work, see Id. at 9-10; and (2) the “OPLOG de facto debarment of MDD” has extended to NAVSEA and MSC, see id. at 11. The Federal Defendants respond that Plaintiffs acknowledge that they received new contracts, contract options, contract modifications, and contract funding from the Department of the Navy during the alleged debarment, see Fed. Defs.' Reply, ECF No. 104-1 at 2, but “[Plaintiffs] discount their significance.” Id.

         In the second round of briefing, Plaintiffs contend that they are entitled to summary judgment as a matter of law with respect to Count I because no genuine issue of material fact exists, Pls.' Mot. for Partial Summ. J., ECF No. 107 at 1, arguing that “they continue to be the subject of de facto debarment by [the] Federal Defendants[, ]” id. at 2. Plaintiffs' argument in the first round of briefing that genuine issues of material fact exist as to Count I is therefore moot. In response, the Federal Defendants argue that Plaintiffs cannot demonstrate the existence of de facto debarment, pointing out that Plaintiffs ignore “twenty-nine contracts, delivery orders, purchase orders, and funding modifications that the [Department of the Navy] has awarded [MDD] since . . . September 2013 . . ..” Fed. Defs.' Opp'n, ECF No. 124 at 5. The Federal Defendants point to a NAVSEA contract awarded to MDD in the amount of $14, 483, 912.86 on August 21, 2014, see Fed. Defs.' Notice, ECF No. 118 at 1, arguing that said contract in addition to other contracts, options, and modifications serve as further evidence that there was no de facto debarment, see Id. at 2.

         1. Plaintiffs Have Failed to Meet the High Standard to Prove De Facto Debarment

          De facto debarment occurs when a contractor or a subcontractor has, for all practical purposes, been suspended or blacklisted from working with a government agency without due process, namely, adequate notice and a meaningful hearing. Phillips I, 894 F.Supp.2d at 81 (citations omitted). The United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) has held:

[W]hen the Government effectively bars a contractor from virtually all Government work due to charges that the contractor lacks honesty or integrity, due process requires that the contractor be given notice of those charges as soon as possible and some opportunity to respond to the charges before adverse action is taken.

Old Dominion Dairy Prods., Inc. v. Sec'y of Def., 631 F.2d 953, 955-56 (D.C. Cir. 1980) (emphasis added); see also Reeve Aleutian Airways, Inc. v. United States, 982 F.2d 594, 598 (D.C. Cir. 1993) (“[T]he typical debarment [is a] ban on contracting for ‘virtually all government work' for a fixed period of time .. . .” (citations omitted)).

         The standard for proving de facto debarment is high. E.g., Pub. Warehousing Co. K.S.C. v. Def. Supply Ctr. Phila., 489 F.Supp.2d 30, 45 n.13 (D.D.C. 2007); Highview Eng'g, Inc. v. U.S. Army Corps of Eng'rs, 864 F.Supp.2d 645, 649 (W.D. Ky. 2012) (“Highview II”) (“Plaintiffs must meet a high standard when seeking to prove a de facto debarment claim.”). To prevail on their motion for partial summary judgment as to Count I, Plaintiffs must demonstrate that there is no genuine dispute of a material fact as to: a “systematic effort by the procuring agency to reject all of the bidder's contract bids.” TLT Constr. Corp. v. United States, 50 Fed.Cl. 212, 215 (2001) (emphasis added) (citation omitted). The Court can find de facto debarment based on either: (1) “a statement that the agency will not award a contract to the disappointed bidder in the future”; or (2) “the conduct of the agency.” Leslie & Elliott Co. v. Garrett, 732 F.Supp. 191, 195 (D.D.C. 1990); see also TLT Constr. Corp., 50 Fed.Cl. at 215-16. “A Federal agency may debar a person . . . .” 2 C.F.R. § 180.800; see also Highview Eng'g, Inc. v. U.S. Army Corps of Eng'rs, No. 3:08-CV-647-S, 2010 WL 2106664, at *5 (W.D. Ky. May 24, 2010) (“Highview I”) (“[N]o individual person debars a contractor. Rather, the [U.S. Army] Corps [of Engineers] takes such actions as an entity.”).[14]

         As the Federal Defendants observe, see Fed. Defs.' Mot. to Dismiss, ECF No. 88 at 27 n.12, “[p]reclusion from a single contract is insufficient to establish de facto debarment.” Highview II, 864 F.Supp.2d at 653.[15] The Court must grant the Federal Defendants' motion for summary judgment where Plaintiffs “though perhaps injured in some respects, cannot demonstrate broad preclusion from government contracting, as the law of this [C]ircuit requires . . . .” Trifax Corp. v. District of Columbia, 314 F.3d 641, 642 (D.C. Cir. 2003) (“Trifax II”) (emphasis added); see also Mem. Op., Trifax Corp. v. District of Columbia, No. 98-cv-2824 (GK) (D.D.C. Nov. 2, 2001), ECF No. 166 at 19 (“Trifax I”) (granting defendant's ...


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