Air Borealis Limited Partnership v. United States

         In the United States Court of Federal Claims
                                   No. 22-1554C
                            (Filed: December 12, 2022)
                              FOR PUBLICATION
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AIR BOREALIS LIMITED                  *
PARTNERSHIP,                          *
                                      *
                  Plaintiff,          *
                                      *
v.                                    *
                                      *
UNITED STATES,                        *
                                      *
                  Defendant,          *
                                      *
                  and                 *
                                      *
KENN BOREK AIR LTD.,                  *
                                      *
                  Defendant-          *
                  Intervenor.         *
                                      *
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      Tyler Dahlin Evans, Steptoe & Johnson LLP, Washington, D.C., for Plaintiff.
With him on briefs were Caitlin Conroy and Joseph McClure, Steptoe & Johnson LLP,
Washington, D.C.
       Amanda L. Tantum, Senior Trial Counsel, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, D.C., for
Defendant. With her are Brian M. Boynton, Principal Deputy Assistant Attorney
General, Civil Division, Patricia M. McCarthy, Director, and L. Misha Preheim,
Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, D.C, as well as Alissa J. Schrider, Major, USAF,
Trial Attorney, and Sandy Caruco, Trial Attorney, Langley AFB, Virginia.
      Mark D. Colley, Arnold & Porter Kaye Scholer LLP, Washington, D.C., for
Defendant-Intervenor. With him on briefs were Amanda J. Sherwood and Julia
Swafford, Arnold & Porter Kaye Scholer LLP, Washington, D.C.
                             OPINION AND ORDER
      Air Borealis Limited Partnership (“Air Borealis”) protests award of a contract
to provide airlift support services for the United States Air Force in the Canadian
Arctic. See Compl. (ECF 1). The offeror that will perform the work and receive
payment, Kenn Borek Air Ltd. (“Kenn Borek”), has moved to intervene. See Motion
(ECF 17). The government has not opposed, but Air Borealis has. See Opp. (ECF 25);
see also Reply (ECF 28). Air Borealis’s arguments are meritless, so the motion is
GRANTED.
       The dispute over intervention arises from an unusual regulatory system for
certain contracts with Canadian suppliers. Kenn Borek and Air Borealis have not
supported their briefs with documentary evidence, and Kenn Borek does not yet have
access to the administrative record. Air Borealis has also raised complex legal
arguments, going to the merits, about regulatory requirements for the award process.
As a result, some of the details are uncertain. The parties agree, though, on the broad
outline, which is as follows.
       United States Department of Defense (“DoD”) contracts with Canadian
suppliers are, with certain exceptions, managed by the Canadian Commercial
Corporation (“CCC”), a “Crown corporation” owned by the Canadian government.
Although bids in this case were submitted to DoD, the CCC had at least some role in
reviewing them. See, e.g., Defense Federal Acquisition Regulation Supplement
(“DFARS”) 225.870-3 (codified at 48 C.F.R.). DoD then typically awards the contract
to CCC, DFARS 225.870-4(a), which in turn awards the contract to the successful
offeror and administers the contract, DFARS 225.870-1(c). The Canadian government
guarantees performance of contracts awarded to the CCC. DFARS 225.870-1(a). But
the successful offeror performs the work. Although payment passes through the CCC,
in substance it goes from DoD to the successful offeror. In this case, again, Kenn
Borek was the successful offeror.
      There are two grounds for intervention: intervention as of right, and
permissive intervention. See RCFC 24. As relevant here, this Court must permit
timely intervention as of right when a proposed intervenor:
       claims an interest relating to the property or transaction that is the
       subject of the action, and is so situated that disposing of the action may
       as a practical matter impair or impede the movant’s ability to protect its
       interest, unless existing parties adequately represent that interest.
RCFC 24(a)(2). 1 The proposed intervenor’s interest must be “of such a direct and
immediate character that the intervenor will either gain or lose by the direct legal
operation and effect of the judgment.” Am. Mar. Transp., Inc. v. United States, 870


1The parties do not dispute timeliness. Kenn Borek moved to intervene before the deadline set by the
Court’s scheduling order (ECF 15), and more than a month before its motion for judgment on the
administrative record would be due. The motion is therefore timely.

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F.2d 1559, 1561 (Fed. Cir. 1989) (quoting United States v. AT&T, 

(D.C. Cir. 1980)). In addition, only a “legally protectable” interest counts, i.e., an
interest “which the substantive law recognizes as belonging to or being owned by the
applicant.” 

 at 1562 (quoting New Orleans Public Service, Inc. v. United Gas Pipe
Line Co., 

 (5th Cir. 1984)). The Court has discretion to grant a timely
motion for permissive intervention when a proposed intervenor “has a claim or
defense that shares with the main action a common question of law or fact,” taking
into account whether intervention would “delay or prejudice the adjudication of the
original parties’ rights.” RCFC 24(b). 2 Intervention in this case is appropriate under
either ground.
       Kenn Borek may intervene as of right. RCFC 24(a)(2). 3 It appears from the
limited facts presented in the motion briefs that Kenn Borek holds a legal right to be
paid for its work. Kenn Borek received that right after participating in a contracting
process which — while different from other contracting processes because of CCC’s
involvement — is still governed by statutes, regulations, and caselaw. That right
constitutes an “interest relating to the … transaction that is the subject of the action.”

 Kenn Borek stands to lose the interest by operation of a judgment resolving this
case in favor of Air Borealis. Am. Mar. Transp., 870 F.2d at 1561. The interest is
“legally protectable” because it belongs to Kenn Borek directly. Id. as 1562.
       Air Borealis argues that because of CCC’s presence as an intermediary, Kenn
Borek is essentially a subcontractor with only an indirect economic interest in the
case. See Opp. at 2–3. That is absurd, verging on frivolous. Unlike other
subcontractors, Kenn Borek has a legal right — awarded by government agencies
acting pursuant to legally defined processes — to be paid for work. That leaves no
defensible comparison between Kenn Borek and the unsuccessful intervenors in Air
Borealis’ authorities. See, e.g., Am. Mar. Transp., 870 F.2d at 1562 (party “having no
privity claim in a contract”); Aeroplate Corp. v. United States, 

(2013) (similar); United Keetoowah Band of Cherokee Indians of Okla. v. United
States, 

 (Fed. Cir. 2007) (party with an interest separate from the

2 A motion to intervene must “be accompanied by a pleading that sets out the claim or defense for
which intervention is sought.” RCFC 24(c). No such pleading accompanies Kenn Borek’s motion, but
although Air Borealis argues that Kenn Borek has not identified claims or defenses, it has not objected
to the lack of a pleading. This Court has sometimes considered a pleading unnecessary in bid protest
interventions. Mitchco Int’l, Inc. v. United States, 

, 685 n.2 (2020).
3 Many decisions from this Court grant intervention as of right to successful offerors in bid protests,

often as a matter of course with little debate. See, e.g., Winston-Salem Indus. for the Blind, Inc. v.
United States, 

, 646 (2019); Tech. Innovation All. LLC v. United States, No. 19-1115C,

 (Fed. Cl. Aug. 1, 2019); Progressive Indus., Inc. v. United States, No. 14-1225C, 

, at *3 (Fed. Cl. Apr. 17, 2015); Emerald Coast Finest Produce Co. Inc. v. United States,

 (2006); RISC Mgmt. Joint Venture v. United States, 

, 626 n.2 (2006).

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one subject to litigation); Anchor Sav. Bank, FSB v. United States, No. 95-39, 

, at *2 (Fed. Cl. Aug. 31, 2012), aff’d, 

 (Fed. Cir. 2013)
(similar); Osage Tribe of Indians of Oklahoma v. United States, 

(2008) (party with no interest in the property subject to the suit). Rather than viewing
CCC as a contractor and Kenn Borek as a subcontractor, it may even be more accurate
to characterize CCC as a delegee of DoD’s authority in issuing the contract.
       This case is much more like Mitchco International, Inc. v. United States, 

 (2020). That case involved a statutory system for awarding contracts that
resembles the regulations applicable here. “[T]he nominal awardee” of a contract was
the Commonwealth of Kentucky as a “sponsoring state agency,” but the nominal
subcontractor was the entity “that st[ood] to win or lose economically in the end.” 

. After granting permissive intervention, the Court explained that
“intervention would be permissible under [RCFC] 24(a)(2)” as well. 

 At argument
Air Borealis distinguished the statutory contract system on various bases, but all that
seems to have mattered for the Mitchco Court’s analysis of the proposed intervenor’s
interest was the economic substance.
       Air Borealis similarly emphasizes that CCC has an independent interest
because of its role as a reviewer of offers and as guarantor and administrator of the
contract. Opp. at 4–5. I assume, without deciding, that CCC has such an interest. But
that is irrelevant to the legal standard, which looks to Kenn Borek’s interest — not
to whether other parties also have an interest. Whatever decisions CCC might have
made during the award process, and whatever it might do as intermediary between
Kenn Borek and DoD, I see no real dispute that the net result of the procurement has
been to assign Kenn Borek a legal right to work and be paid. The rest seems to be
mere distraction and indirection.
       The government’s presence in the case is not adequate to protect Kenn Borek’s
interest. RCFC 24(a)(2). Courts presume that “the government as sovereign
adequately represents the interest of citizens concerning matters that invoke
‘sovereign interests.’” Wolfsen Land & Cattle Co. v. Pac. Coast Fed’n of Fishermen’s
Associations, 

 (Fed. Cir. 2012) (quoting Standard Heating & Air
Conditioning Co. v. City of Minneapolis, 

 (8th Cir. 1998)). Air
Borealis cites a handful of authorities applying that presumption more broadly
whenever the government is a party, including one case involving interventions by
an awardee in a bid protest. Opp. at 6; see Anderson Columbia Env’t, Inc. v. United
States, 

 (1999). But that is mistaken. See Northrop Grumman
Info. Tech., Inc. v. United States, 

, 418 n.14 (2006). While the
government may well represent citizens when it comes to sovereign interests, the
government’s interest in receiving contractual performance and defending its
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decisions during a procurement is distinct from a contractor’s interest in receiving an
award and being paid. See, e.g., Mitchco, 149 Fed. Cl. at 685 (“The federal government
is largely indifferent to who actually performs the work[.]”); Winston-Salem Indus.
for the Blind, 144 Fed. Cl. at 645 (2019) (similar); Northrop Grumman, 

.
       Because the government and Kenn Borek have different aims, it is entirely
possible that the government could take positions that are not in Kenn Borek’s
interest. The government might deny procedural errors that Kenn Borek would
concede and defend as harmless. Or the government might concede deficiencies in
Kenn Borek’s proposal that Kenn Borek would not admit to. In short, when the
government is participating in commerce, it is unrealistic to think that “collusion,
adversity of interest, or nonfeasance” should be necessary to show different interests
when it comes to Kenn Borek’s rights. Opp. at 6 (quoting John R. Sand & Gravel Co.
v. United States, 

 (2004)). Kenn Borek’s burden to show
inadequacy in the government’s representation is “minimal,” Trbovich v. United Mine
Workers, 

, 538 n. 10 (1972), and so is met here.
      I also conclude that Kenn Borek is entitled to permissive intervention. Air
Borealis argues that Kenn Borek “has not identified any claims or defenses that it
could assert that share a common question of law or fact with the award decision.”
Opp. at 7; see RCFC 24(b)(1)(B) (“On timely motion, the court may permit anyone to
intervene who … has a claim or defense that shares with the main action a common
question of law or fact.”). That argument is inconsistent with the law.
        Air Borealis relies on a hypertechnical theory that because it has not asserted
a claim against Kenn Borek, Kenn Borek does not have a “defense” within the
meaning of RCFC 24(b)(1)(B). Opp. at 7–8. But the Supreme Court has explained that
the analogous federal rule “plainly dispenses with any requirement that the
intervenor shall have a direct personal or pecuniary interest in the subject of the
litigation.” SEC v. U.S. Realty & Improvement Co., 

 (1940). The
“defenses” contemplated by the rule are simply “the kinds of claims or defenses that
can be raised in courts of law as part of an actual or impending law suit.” Amchem
Prods., Inc. v. Windsor, 

, 623 n.18 (1997) (quoting Diamond v. Charles,

, 76–77 (1986) (O’Connor, J., concurring in part and concurring in
judgment)).
      That definition plainly encompasses the arguments the government and Kenn
Borek could raise in motions for judgment on the administrative record, e.g., that the
procurement processes in this case were not arbitrary and capricious. Even if Kenn
Borek has not itself been sued, its arguments are the “kind that can” be raised in

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litigation. 

 (emphasis added). And whatever Kenn Borek’s exact arguments turn
out to be, they would “share[] with the main action a common question of law or fact”
simply because they would arise from the same procurement, reflected in the same
administrative record, and governed by the same law. Although this Court usually
allows successful offerors in bid protests to intervene as of right, it has also allowed
permissive intervention. See Mitchco, 149 Fed. Cl. at 685.
        Air Borealis also suggests that permissive intervention should be denied as a
matter of discretion, or because it would “delay or prejudice the adjudication of the
original parties’ rights.” RCFC 24(b). Air Borealis claims that intervention would
“unnecessarily add to the expense of litigation and result in duplicative pleadings”
because Kenn Borek and the United States will seek the same result based on the
same administrative record. Opp. at 9. That presumes, contrary to the law, that the
government’s litigation positions will be coextensive with Kenn Borek’s. Their
litigation positions may overlap, but Air Borealis’s prognostications are not a good
reason to deny Kenn Borek its say.
         I have considered Air Borealis’s remaining arguments and found them without
merit.
                                   CONCLUSION
         For the foregoing reasons, the motion to intervene (ECF 17) is GRANTED.


         IT IS SO ORDERED.
                                               s/ Stephen S. Schwartz
                                               STEPHEN S. SCHWARTZ
                                               Judge




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