United States Court of Appeals For the First Circuit

No. 21-1144

J-WAY SOUTHERN, INC.,

Plaintiff, Appellant,

v.

UNITED STATES ARMY CORPS OF ENGINEERS,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Patti B. Saris, U.S. District Judge]

Before

Thompson, Lipez, and Kayatta, Circuit Judges.

Ian J. Pinta, with whom Christopher Weld, Jr. and Todd & Weld LLP were on brief, for appellant. Anne Murphy, Attorney, Appellate Staff, Civil Division, with whom Nathaniel R. Mendell, Acting United States Attorney, Brian M. Boynton, Acting Assistant Attorney General, and Charles W. Scarborough, Attorney, Appellate Staff, Civil Division, were on brief, for appellee.

May 10, 2022 THOMPSON, Circuit Judge. Today, we write primarily for

the parties named in this case's caption, and we therefore assume

their familiarity with the facts and travel, as well as the issues

raised and arguments presented. This allows us to get straight to

it, offering the basics and some supplemental information as needed

along the way.

This matter arises out of a terminated June 2015 contract

for dredging waterways in Menemsha Harbor, Martha's Vineyard --

i.e., moving "sandy material from the channels and anchorage of

. . . Menemsha Creek" to Lobsterville Beach via a temporary

hydraulic pipeline. J-Way Southern ("J-Way") got this gig after

it was the lowest bidder on a United States Army Corps of Engineers

("USACE") solicitation for the dredging work. But J-Way's

performance, in USACE's view, was deficient: J-Way did not

complete the work within the timeframe set forth in the contract.

There was some procedural scuffling regarding J-Way's default on

the contract, and, ultimately, USACE terminated the contract.1 J-

1 A first termination for default was rescinded by USACE after J-Way argued in an administrative claim under the Contract Disputes Act ("CDA") that its delay was excusable, and that was followed by an agreement between J-Way and USACE to proceed. But J-Way again experienced delays and USACE determined the failure to perform was not excusable, and it therefore issued a second termination notice for default. USACE made a demand upon J-Way's performance bond to get the work done, and, thereafter, USACE and J-Way's surety executed a Takeover Agreement that led to a new contractor being procured by the surety. For its part, J-Way eventually (two-plus years after the default termination) submitted another administrative claim under the CDA, arguing the second default

- 2 - Way filed suit, alleging improper termination and breach of the

contract by USACE. In response, USACE moved to dismiss for failure

to state a claim. The district court granted USACE's dismissal

motion, ruling (as is relevant to our decision today) that J-Way's

claims were time-barred. J-Way S., Inc. v. United States,

, 94 (D. Mass. 2021). J-Way appeals.

After careful de novo review (see, e.g., N.R. by &

through S.R. v. Raytheon Co.,

(1st Cir. 2022))

of the record, the parties' appellate submissions, and the

applicable law, we spy no basis to disturb the district court's

decision, which is comprehensive and well-reasoned. And "when

lower courts have supportably found the facts, applied the

appropriate legal standards, articulated their reasoning clearly,

and reached a correct result, a reviewing court ought not to write

at length merely to hear its own words resonate." deBenedictis v.

Brady-Zell (In re Brady-Zell),

(1st Cir. 2014);

see also Vargas-Ruiz v. Golden Arch Dev., Inc.,

(1st

Cir. 2004) ("[W]hen a trial court accurately sizes up a case,

applies the law faultlessly to the discerned facts, decides the

matter, and articulates a convincing rationale for the decision,

there is no need for a reviewing court to wax longiloquent.").

termination was unlawful. No action was taken by USACE on that claim because it understood the claim to be time-barred. That second default termination is the impetus for the instant litigation.

- 3 - This case fits that mold. We thus affirm substantially on the

basis of Judge Saris' thorough decision.

Before we reach our brief discussion of the arguments

advanced on this appeal, though, we must pause to have a look at

a jurisdictional issue that was much debated below. That debate

hasn't been revisited before us on appeal, but "[t]his Court has

an independent duty to assess the existence of subject matter

jurisdiction." Almeida-León v. WM Cap. Mgmt., Inc.,

,

11 n.13 (1st Cir. 2021) (citing Espinal-Domínguez v. Puerto Rico,

(1st Cir. 2003)).

Jurisdiction

When J-Way filed its complaint in district court, it

asserted admiralty jurisdiction because the parties' dispute arose

out of a maritime contract under the CDA,

(d).

Disagreeing with that jurisdictional premise, the government moved

to dismiss or transfer for lack of subject matter jurisdiction,

arguing, inter alia, that "[t]he contract is a standard Army Corps

construction contract, . . . and disputes arising from such

contracts have been resolved at specialty government contract

appeal boards or in the U.S. Court of Federal Claims for over 150

years." According to the government, its contract with J-Way was

"not a maritime contract in whole or in part" -- the contract

contemplated "digging earth, not [water] navigation," and thus was

"a standard federal construction contract." Indeed, the

- 4 - government, citing a history of dredging-contract-dispute cases

being heard in the Court of Federal Claims, insisted that court,

as well as agency boards, have always exercised jurisdiction over

matters such as this. J-Way retorted that the dispute did not

arise from a construction contract at all; rather, the dispute

clearly had its genesis in a maritime contract, with the contract's

principal purpose being the traditionally maritime activity of

dredging to make a waterway more navigable to promote commerce.

Accordingly, J-Way argued, the federal district court in which it

had filed its case actually enjoyed exclusive jurisdiction

pursuant to

(1) (providing that "[t]he district

courts shall have original jurisdiction, exclusive of the courts

of the States, of . . . [a]ny civil case of admiralty or maritime

jurisdiction") and the CDA,

(d) (excepting appeals

"arising out of maritime contracts" from the jurisdiction of the

Court of Federal Claims or the agency boards of contract appeals).

After hearing argument on the issue, the district court

denied the motion to dismiss for lack of subject matter

jurisdiction, holding that it had admiralty jurisdiction over the

dredging contract dispute. J-Way S., Inc. v. United States,

, 70 (D. Mass. 2020). That decision wasn't appealed.2

2We note that an appeal of that decision wouldn't have landed on our desks; it would've gone to the Federal Circuit pursuant to

(d)(4)(B).

- 5 - Before us, the government now agrees that "[t]he

district court had jurisdiction over this Contract Disputes Act

action under

(1), and

(d) and

7104(b)." But we are dutybound to probe subject matter

jurisdiction nonetheless. We, like the district court, find

subject matter jurisdiction exists, and we agree with the district

court's reasoning that led to this conclusion. By way of

explanation, we borrow extensively from the district court's sound

analysis (again, see In re Brady-Zell,

) and pepper

that solid reasoning with a few of our own observations.

Generally, the United States Court of Federal Claims has

exclusive jurisdiction over contract claims against the U.S. in

excess of $10,000, see

(a)(2), 1491(a)(1), but

the CDA vests admiralty jurisdiction in the federal district courts

for lawsuits against the U.S. that "aris[e] out of maritime

contracts,"

(d).3 See also

(providing exclusive federal district court jurisdiction for

"[a]ny civil case of admiralty or maritime jurisdiction"); 46

3

(d) provides: Maritime contracts. – Appeals under section 7107(a) of this title and actions brought under sections 7104(b) and 7107(b) to (f) of this title, arising out of maritime contracts, are governed by [the Suits in Admiralty Act] or [the Public Vessels Act], as applicable, to the extent that those [Acts] are not inconsistent with this chapter.

- 6 - U.S.C. § 30906 (instructing that civil actions in admiralty against

the U.S. must be brought in federal district court); El–Shifa

Pharm. Indus. Co. v. United States,

(Fed. Cir.

2004) (noting that

"grant[s] exclusive and

original jurisdiction to federal district courts over civil cases

in admiralty and maritime jurisdiction"); Thrustmaster of Tex.,

Inc. v. United States,

(2004) (observing

that exclusive jurisdiction to hear CDA claims regarding maritime

contracts lies with the federal district courts).

Whether a contract is a maritime contract is a difficult

question given the conceptual (rather than spatial) boundaries of

admiralty jurisdiction, Norfolk S. Ry. Co. v. Kirby,

(2004), and "the answer 'depends upon . . . the nature and

character of the contract,'"

(alteration in original)

(quoting N. Pac. S.S. Co. v. Hall Bros. Marine Ry. & Shipbuilding

Co.,

(1919)). "[T]he true criterion" for making

this determination is "whether [the contract in question] has

'reference to maritime service or maritime transactions.'"

(quoting Hall Bros.,

). Indeed, "the fundamental

interest giving rise to maritime jurisdiction is the protection of

maritime commerce." Id. at 25 (cleaned up) (quoting Exxon Corp.

v. Cent. Gulf Lines, Inc.,

(1991)).

In view of that interest, a court's inquiry should be

focused "on whether the principal objective of a contract is

- 7 - maritime commerce." Id.; see also P.R. Ports Auth. v. Umpierre-

Solares,

(1st Cir. 2006) (describing this inquiry

as one focused on "whether the contract 'relate[s] to the

navigation, business or commerce of the sea'" (alteration in

original) (quoting Cunningham v. Dir., OWCP,

, 109 n.11

(1st Cir. 2004))). Because "[w]hile it may once have seemed

natural to think that only contracts embodying commercial

obligations between the 'tackles' (i.e., from port to port) have

maritime objectives, the shore is now an artificial place to draw

a line" -- "[m]aritime commerce has evolved along with the nature

of transportation and is often inseparable from some land-based

obligations." Kirby,

; cf.

("If a

[contract]'s sea components are insubstantial, then the [contract]

is not a maritime contract.").

The government's argument against the district court's

exercise of jurisdiction over the contract dispute boiled down to

a customs/historical practice position: Citing cases dating back

to 1857, the government observed that the Court of Federal Claims

(and its predecessor, the United States Claims Court) have

exercised jurisdiction over government dredging contract disputes

since that time. But, as the district court explained, "no court

has squarely considered whether a government dredging contract is

a maritime contract," and "[t]he Supreme Court, the Federal

Circuit, and the Court of Federal Claims have all held that they

- 8 - are 'not bound by a prior exercise of jurisdiction in a case where

it was not questioned and it was passed sub silentio.'" J-Way,

460 F. Supp. 3d at 69 (quoting United States v. L.A. Tucker Truck

Lines, Inc.,

(1952), and citing Huston v. United

States,

(Fed. Cir. 1992); Red River Holdings,

LLC v. United States,

, 796 n.33 (2009)). "The

Court of Federal Claims' exercise of jurisdiction over government

dredging contract disputes has never been analyzed."

And so, plotting a course through these new waters, the

district court deployed that "principal objective" analysis the

Supreme Court set out in Kirby,

, to determine

whether the contract was a maritime contract such that the district

court had jurisdiction over the dredging contract dispute before

it. Here's how that went.

"The undisputed purpose of the contract was to dredge a

navigable waterway and then deposit sand on a beach." J-Way, 460

F. Supp. 3d at 69 (citing the contract's explanation that "[t]he

work of this project will consist of the maintenance dredging of

shoaled areas within the existing Federal Navigation Channel").

Dredging a navigable waterway is traditionally a maritime

activity, and such a dredging contract facilitates maritime

commerce, which anchors maritime jurisdiction. Id. at 69-70

(citing Misener Marine Constr., Inc. v. Norfolk Dredging Co.,

(11th Cir. 2010) (concluding that a dredging contract

- 9 - was a maritime contract because its "primary objective . . . was

dredging a navigable waterway," and that "had a direct effect on

maritime services and commerce")); see also Weston/Bean Joint

Venture v. United States,

(2015) (observing

that the U.S. Army Corps manual defines "maintenance dredging" as

"[t]he cyclic dredging of the same area over a period of time to

remove accumulating sediments and to maintain ship and barge

traffic" (alteration in original)).4

The district court was unpersuaded by the government's

argument, based on federal regulations referring to dredging as a

type of construction, that the principal objective of this contract

was construction, rather than maritime commerce -- indeed, the

"regulatory description does not determine the jurisdictional

question where, as here, the primary objective of the

'construction' was to assist maritime commerce." J-Way,

And Puerto Rico Ports Authority,

, found a maritime contract when parties entered into it for the purpose of securing removal of a sunken boat from San Juan Harbor's navigable waters since its purpose thus was removing an obstruction to maritime navigation and commerce. See

(comparing D.M. Picton & Co., Inc. v. Eastes,

(5th Cir. 1947) (reasoning that "it would be difficult to imagine a contract more completely maritime" than a contract for removal of materials that were "menaces to navigation," and, accordingly, holding that a claim for breach of contract "to remove hazards to navigation" was within admiralty jurisdiction), with R. Maloblocki & Assocs., Inc. v. Metro. Sanitary Dist.,

(7th Cir. 1966) (explaining that the purpose of the dredging contract there was flood control and "any effect the project may have had upon navigability was, at best, incidental," so the contract was not maritime in nature (internal quotation marks omitted))).

- 10 - Supp. 3d at 70. The district court was similarly unpersuaded by

the government's point that substantial portions of the contract's

period were meant to be spent on what it viewed as purely non-

maritime things, like grading the beach, mobilizing and

demobilizing equipment, constructing a temporary land-borne

pipeline, and, in doing these things, using equipment that was not

vessel-borne. That's all well and good. But no legal support was

offered to explain "why these considerations should outweigh the

contract's plain language and compensation scheme."

Overall,

"the contract provisions demonstrate that the primary purpose of

the dredging was to facilitate maritime commerce."

And while it was true that the contract's additional

objectives included protecting local wildlife and restoring

Lobsterville Beach (where the dredged sediment was to be deposited,

recall), the government simply had "not produced any evidence from

which th[e c]ourt [could] find that those objectives were the

primary purpose of the contract" under Kirby's test.

"[T]he

plain language of the contract indicates that J-Way was paid based

on the amount of sediment dredged," and "[t]he contract provided

no separate remuneration for depositing the sediment or grading

the beach."

(citing Kirby,

(noting that

maritime commerce is "often inseparable from some land-based

obligations")); see also Kirby,

("[A contract's]

character as a maritime contract is not defeated simply because it

- 11 - also provides for some land carriage."). This was driven home by

the government's concession "that less time was allocated to

grading the beach than to dredging the sediment." J-Way, 460 F.

Supp. 3d at 70.

Therefore, the district court concluded that, with

"[s]ubstantial portions of the contract . . . dedicated to

improving the navigability of a waterway," "[j]urisdiction over

this contract dispute properly lies in the federal district court."

Id.

And we agree -- this contract is, as the saying goes, of

a "genuinely salty flavor." Kirby,

(quoting Kossick

v. United Fruit Co.,

(1961) (Harlan, J.)). Its

nature and character sound in maritime services, with the contract

aimed at protecting and effectuating maritime commerce via the

goal of improving navigability of the waterway. See generally id.

at 23-25, 27; P.R. Ports Auth.,

. Its principal

objective was maritime commerce. See Kirby,

. For

all of these reasons, the federal district court had jurisdiction

over this maritime contract dispute.

Merits

Jurisdiction navigated, we turn now to the merits.

The CDA, as regulated by the Federal Acquisition

Regulations ("FAR"), which govern contracts with the government,

specifies that an appeal of a final default decision must be made

- 12 - to the appropriate agency board within ninety days from the date

of its receipt or to the federal court within twelve months from

the date of its receipt. See

J-Way's improper

default termination claim wasn't filed within the statutory

deadline, and J-Way does not attempt to argue otherwise. Instead,

as it argued below, J-Way insists that its claim should not be

time-barred because the 2017 termination notice was defective in

that it didn't comply with the FAR: It failed to inform J-Way

that it was a final decision and referred J-Way only to the

contract's disputes clause, which states nothing about the appeals

process or J-Way's appellate rights. J-Way argues it detrimentally

relied on that fatally flawed notice. What's more, says J-Way,

its claim could also be considered timely under the Fulford

doctrine, see Fulford Mfg. Co.,

,

(May 20, 1955), since that doctrine extends the time in which a

contractor can challenge a default termination if the contractor

is assessed reprocurement costs. J-Way's thinking is that, "where

5 As explained above, the jurisdictional provision of the Suits in Admiralty Act,

, overrides that of the CDA to govern this maritime contract. The Suits in Admiralty Act also provides for a two-year statute of limitations,

§ 30905 -- one year longer than that of the CDA,

(b)(3). In their briefs on appeal, neither party argues that the longer limitations period should govern this maritime contract or would bear on the issue of notice. And J-Way's suit (filed more than two years after the default termination), see J-Way, 460 F. Supp. 3d at 67, would have been untimely even under a two-year limitations period. We therefore express no view on the question.

- 13 - a surety pays a replacement contractor and then assesses those

reprocurement costs against the defaulted contractor," the Fulford

doctrine should be extended to apply to that situation as well.

J-Way acknowledges no court has actually done what it's asking us

to do on this point, but says "it stands to reason that" the

doctrine could apply as J-Way wants. And J-Way tells us its other

distinct breach of contract claims also are timely -- they don't

arise from the default termination and were filed within six years

of USACE's independent breaches of the dredging contract.6 See

(a)(4)(A) (setting a six-year limitations period for

contract claims against the government).

As we said when we kicked off today's opinion, the

district court thoughtfully dealt with these issues already,

concluding that, under the applicable legal framework, all of J-

Way's claims are time-barred, and none of J-Way's above-listed

arguments against that conclusion persuade. J-Way, 516 F. Supp.

3d at 89-93. We substantially echo the district court's reasoning

on each issue. Specifically:

6 J-Way also alleged assigned claims on behalf of J-Way's surety, and the district court had to figure out whether the assignment of the surety's claims to J-Way was invalid. It concluded that the surety could not assign its claims to J-Way. J-Way, 516 F. Supp. 3d at 94. Before us, J-Way does not challenge this aspect of the district court's ruling.

- 14 - • The second termination notice was missing the required

regulatory language, yes.7 But it provided J-Way with

adequate notice nonetheless. It explained J-Way was in

default but could appeal pursuant to the contract's disputes

clause -- and the disputes clause (which consists of § 52.233-

1 of the FAR, as incorporated by reference in the contract)

in turn states the contracting officer's decision on a claim

is "final unless the Contractor appeals or files a suit as

provided in 41 U.S.C. chapter 71" (with § 7104 laying out the

ninety-day or twelve-month time limit for appealing). Id. at

7 The missing regulatory language comes from FAR 33.211(a)(4)(v). Pursuant to

(e), "[t]he contracting officer's decision shall state the reasons for the decision reached and shall inform the contractor of the contractor's rights as provided in this chapter." And the FAR provision instructs that "the contracting officer shall . . . [p]repare a written decision that shall include . . . [p]aragraphs substantially as follows:"

This is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals. If you decide to appeal, you must, within 90 days from the date you receive this decision, mail or otherwise furnish written notice to the agency board of contract appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken. The notice shall indicate that an appeal is intended, reference this decision, and identify the contract by number.

(a)(4)(v). It also explains that a contractor can "bring an action directly in the United States Court of Federal Claims (except as provided in 41 U.S.C. [§] 7102(d), regarding Maritime Contracts) within 12 months of the date [the contractor] receive[s] th[e] decision." Id.

- 15 - 90-91; see also RMA Eng'g S.A.R.L. v. United States,

, 216 (2018) (finding that a notice of termination was

valid under the CDA where the notice stated that the

contractor had the right to appeal under the disputes clause).

This means that even though the notice omitted the regulatory

language, it was not prejudicially defective because it

provided J-Way with adequate notice.

• Because we conclude that the notice was not defective from an

adequate-notice standpoint, we need not weigh in on J-Way's

argument that it detrimentally relied on a defective notice.

(That said, we tend to agree with the district court's

explanation that J-Way's asserted detrimental reliance was

unreasonable because it failed to allege any facts to "support

a reasonable belief that the [g]overnment would reconsider

the second Termination for Default." J-Way, 516 F. Supp. 3d

at 91.)

• Next, we decline to extend the scope of the Fulford doctrine

in the novel way J-Way urges us to. The doctrine "allows a

contractor to challenge a [g]overnment assessment for excess

reprocurement costs by challenging the underlying termination

for default, even if a challenge to the termination for

default would otherwise be time-barred." Id. at 92 (citing

MES, Inc. v. United States,

(2012)).

The purpose of the doctrine is not to allow contractors to

- 16 - bring untimely claims in the circumstances in which J-Way

finds itself, i.e., the government has made no claim for

reprocurement costs against J-Way.

So J-Way cannot lean

on Fulford to resuscitate untimely claims that have nothing

to do with excess reprocurement costs.8

• And the district court was right that the breach of contract

claims are all based on the same set of facts and seek the

same relief as the improper termination claim, amounting to

impermissible "back-door challenges" to the decision to issue

the second default termination notice.

at 93 (citing

Mil. Aircraft Parts,

,

(June

3, 2016) (declining to field a breach of contract claim in a

similar situation, i.e., when the "affirmative claim sets

8We take this opportunity to explain a bit more about why we decline to extend Fulford to situations in which the government has made no claim against the contractor in default. Aside from what we've just explained, there are several reasons for our rejection of J-Way's invitation to do so: (1) The contractor will know when demand is placed on its surety; indeed the contractor will in most cases of charged default -- as here -- know that there is a risk of reprocurement costs; (2) Appealing or suing within the statutory period is a readily available safe harbor; (3) The risk of engaging in litigation that turns out to have been unnecessary can be mitigated with a standstill or tolling agreement; and (4) If contractors could wait until the surety actually makes demand on the contractor, there would be no final decision by the government to trigger the appeal clock, and the government would lose the ability to secure repose. In so holding, we doubt that we create a trap for the unwary: J-Way was notified at the time of its termination that the government was making a claim on J-Way's performance bond, and should have anticipated that its surety would seek to recoup any excess costs.

- 17 - forth actions on the part of [the government] . . . that may

have constituted [contract] breaches," but the breach of

contract claim "is based on the same set of facts,

circumstances, and actions preceding the default terminations

and is inextricably bound up with the issue of the propriety

of those terminations" (alterations in original))).

And so we reject J-Way's arguments against the operation

of the time bar and decline to breathe new life into the untimely

complaint. All we'll add -- though we think it plenty clear on

the face of the district court's decision -- is this. The

termination notice bespeaks finality over and over, plus, from the

adequate-notice standpoint, it provided the relevant regulatory

and statutory breadcrumbs a reader could (and should) follow to

find the appellate logistics.9 There is nothing unreasonable about

expecting a company with the benefit of counsel (like J-Way) to

follow the sources from one to the other to obtain the appellate

9 No one says the notice provided the required regulatory language -- the government didn't try to, nor could it. In its brief, the government indicates that the notice provided "was technically defective under the FAR, but it contained the critical information necessary for J-Way to appeal." At oral argument, the government tried to walk that back, stating it was not conceding the notice was defective. In any event, we would have echoed the district court's call for the government to "include the specific language provided in FAR 33.211(a)(4)(v) in future notices," J- Way, 516 F. Supp. 3d at 91 n.9, but, as the government explained at oral argument, it has since done exactly that "as a matter of best agency practice."

- 18 - rights information that is clearly laid out in the disputes

clause's provisions. See, e.g., Turner Constr. Co., Inc. v. United

States,

(Fed. Cir. 2004) (explaining that

parties to government contracts are responsible for knowing what

laws apply to the contract, "and reasonable professional

competence in reading . . . contracts is presumed"). The

government met its obligation to inform J-Way of its rights by

giving adequate notice.

Conclusion The district court's order granting the government's

motion to dismiss is affirmed. Each side shall bear its own costs.

- 19 -