A & S Council Oil Co., Inc. v. Lader – Case Brief Summary (Federal Court)

A & S Council Oil Co., Inc. v. Lader - Case Brief Summary (Federal Court)

In A & S Council Oil Co., Inc. v. Lader, 56 F.3d 234 (D.C.Cir.1995), petroleum suppliers brought an action in a federal district court against the Small Business Administration based upon allegations of misconduct on the part of the Small Business Administration (SBA) during pre-contract negotiations for the provision of petroleum to military installations.

The district court initially found that it lacked jurisdiction over the action by virtue of the CDA, and transferred the matter to the U.S. Claims Court.

The Claims Court found no CDA preemption because the plaintiffs disavowed that they were alleging any contract claims and because the complained of acts of the SBA occurred prior to the execution of a contract with the petroleum suppliers.

On appeal, the D.C. Circuit reversed the Claims Court's determination of no CDA preemption:

The point on which the Claims Court rested--that the claimed acts of illegality were statutory violations anterior to the contract formation--does not seem to us to render the claims non-contractual. In the first place, any number of standard contract doctrines, such as duress and mistake of fact involve pre-contract behavior.

It is true that plaintiffs have disavowed the notion that they are making contract claims. Instead, they say, the damages they have suffered flow from unlawful agency action. That is in a sense true.... In any event, a plaintiff may not avoid the jurisdictional bar of the CDA merely by alleging violations of regulatory or statutory provisions rather than breach of contract. Where the alleged damage is entirely due to and measured in reference to plaintiffs' performance of a contract, and is exclusively money damages, plaintiffs' claim that the wrong originated in some statutory violation does not strip the case of its contractual character. 56 F.3d at 240-241.