[00:00:28] Speaker 04:
Next case is St.

[00:00:29] Speaker 04:
Bernard Parish Government versus the United States, 2018-1204.

[00:00:35] Speaker 04:
Mr. McGooey, is it?

[00:00:42] Speaker 03:
Yes, Your Honor.

[00:00:43] Speaker 04:
When you are ready.

[00:00:50] Speaker 03:
May it please the court.

[00:00:52] Speaker 03:
Your Honor, the issue here is that the lower court heir

[00:00:56] Speaker 03:
in finding that the cooperative agreement between the United States, NRCS, and St.

[00:01:01] Speaker 03:
Bernard Parish government was not an enforceable contract that allowed for money damages.

[00:01:07] Speaker 01:
Let me ask you a question at the outset to make sure I understand the rules of the game that we're playing.

[00:01:15] Speaker 01:
Is it your view that this agreement was a cooperative agreement under section 6305 of Title 31?

[00:01:26] Speaker 03:
In its terms, it is under that section, but it's also a procurement contract.

[00:01:31] Speaker 03:
And that section that you cite, Judge Bryson, doesn't say anything about a cooperative endeavor agreement not being enforceable.

[00:01:39] Speaker 03:
It just uses that as the format to enter into these type of agreements.

[00:01:43] Speaker 01:
But there is law that says if an agreement satisfies the requirements of a cooperative agreement, as opposed to a procurement contract, which is, I think,

[00:01:55] Speaker 01:
304, then it is not an agreement that can support a claim for money damages.

[00:02:06] Speaker 03:
I believe the statutes in the cases say that where a cooperative endeavor agreement

[00:02:15] Speaker 03:
format is used for the procurement of services, it is then a binding enforceable contract, because it is a contract for procurement of services.

[00:02:25] Speaker 01:
Well, then it doesn't satisfy the requirement of a cooperative agreement.

[00:02:28] Speaker 01:
It's not a cooperative agreement.

[00:02:29] Speaker 01:
It's a cooperative agreement.

[00:02:30] Speaker 01:
There's a wrong title on it.

[00:02:32] Speaker 03:
In name only.

[00:02:33] Speaker 03:
Right.

[00:02:33] Speaker 03:
If it walks like a duck and quacks like a duck, it's a duck.

[00:02:37] Speaker 03:
And this walks and talks like a procurement contract, because St.

[00:02:39] Speaker 01:
Bernard was obligated to pursue a service.

[00:02:42] Speaker 01:
That was going to be my next question, which is,

[00:02:44] Speaker 01:
That's going to be my next question, which is, what is it about this agreement that doesn't fit hand in glove with the cooperative agreement statute?

[00:02:57] Speaker 01:
Because the cooperative agreement statute says that something where the United States government is giving money to a state or local government check

[00:03:11] Speaker 01:
For the principal purpose of the relationship is to transfer a thing of value to the state money, to carry out a public purpose of support or stimulation authorized by a law of the United States.

[00:03:25] Speaker 01:
The purpose, I take it, was as indicated in the agreement itself to deal with the problems which were laid out in section 216 of the

[00:03:42] Speaker 01:
Public Law 516 back in 1950 is amended, which was to provide funds for emergency measures for runoff retardation and soil erosion prevention, which is exactly what this arrangement was directed to.

[00:04:05] Speaker 01:
Why doesn't that satisfy all the requirements of a cooperative agreement?

[00:04:09] Speaker 03:
because it satisfies the requirements for the procurement of something that gives a benefit to the United States government.

[00:04:17] Speaker 02:
Do you agree with the government's contention that benefits to the government, the federal government, must be direct?

[00:04:26] Speaker 03:
There's case law that says direct benefit, but there's also case law from this circuit, the Keman case, which Judge Bryson was on the panel in, that does make no requirement for direct benefit.

[00:04:36] Speaker 02:
Well, what constitutes a direct benefit?

[00:04:38] Speaker 03:
And that's an interesting question.

[00:04:40] Speaker 03:
Thank you.

[00:04:42] Speaker 03:
It's a direct benefit.

[00:04:44] Speaker 03:
I'll give you an example, a simple example.

[00:04:47] Speaker 03:
A contractor's building a house on a property that he's purchased.

[00:04:51] Speaker 03:
There's a property before that when you drive up has ugly stuff in the backyard.

[00:04:56] Speaker 03:
So he contracts with the owner of that property, it's not his property, to build a six foot nice looking fence that's going to hide all the ugly debris.

[00:05:05] Speaker 03:
And he says, you hire a fence guy to do it.

[00:05:09] Speaker 03:
You give me reasonable receipts not to exceed this amount.

[00:05:12] Speaker 03:
And I'll reimburse you for it.

[00:05:13] Speaker 03:
I'll pay for it.

[00:05:15] Speaker 03:
Well, someone might argue, there's no direct benefit to that contractor.

[00:05:18] Speaker 03:
The fence isn't on his property.

[00:05:21] Speaker 03:
So there's no direct benefit.

[00:05:23] Speaker 03:
But what he want?

[00:05:24] Speaker 04:
Counsel, there's a whole harmless clause in this agreement.

[00:05:27] Speaker 04:
Yes.

[00:05:28] Speaker 04:
Doesn't that work against you?

[00:05:31] Speaker 03:
I don't think so, Your Honor.

[00:05:35] Speaker 03:
The Supreme Court cases that are applicable say that when you're interpreting federal contracts, you use the same type contract interpretation as you do in private contracts.

[00:05:46] Speaker 03:
And the rules of interpretation are that you, and I cite this in my brief, in looking at a contract, you do not read out any clause.

[00:05:55] Speaker 03:
You interpret it as a whole to make the whole contract enforceable.

[00:06:00] Speaker 03:
And you don't interpret it as such to make a clause be of no use.

[00:06:05] Speaker 02:
Against whom would you be holding the government harmless?

[00:06:09] Speaker 02:
You weren't sued by the contractor, were you?

[00:06:11] Speaker 02:
No.

[00:06:12] Speaker 03:
And the whole harmless clause says that St.

[00:06:16] Speaker 03:
Bernard will hold the government harmless for the obligations of the sponsor, St.

[00:06:21] Speaker 03:
Bernard.

[00:06:22] Speaker 03:
So we would hold them harmless if we did something wrong or for the performance of the work.

[00:06:28] Speaker 03:
Well, you can't interpret if you buy my argument that this was a contract that they had to reimburse us.

[00:06:34] Speaker 03:
We don't hold them harmless from the reimbursement obligation.

[00:06:38] Speaker 03:
That would make no sense.

[00:06:39] Speaker 02:
It would also make an annuity.

[00:06:41] Speaker 03:
Correct.

[00:06:42] Speaker 03:
That part of the whole harmless for performance of the work is, for example, if the contractor damaged neighboring properties, if there was a personal injury thing, then we would hold the NCRS harmless

[00:06:56] Speaker 03:
from the liability arising from the work.

[00:06:59] Speaker 03:
But we don't hold them harmless from the obligations that they contracted to in the agreement.

[00:07:05] Speaker 03:
That would make no sense.

[00:07:06] Speaker 03:
And so therefore, the trial court's conclusion to that is contrary to the law and the general rules of contract construction.

[00:07:14] Speaker 01:
Mr. McGuire, as I understand, the structure of the statutes under Title 31 here that we're dealing with is this one is a procurement contract, two is a grant.

[00:07:23] Speaker 01:
And three is this cooperative agreement.

[00:07:25] Speaker 01:
Suppose that, instead of reading cooperative agreement at the top of this agreement, it simply said grant.

[00:07:32] Speaker 01:
And the federal government had told the parish that it was going to grant a couple of million dollars for the parish to do this reconstruction work, which is a public purpose.

[00:07:47] Speaker 01:
Would you think that that constituted a binding contract on the federal government?

[00:07:52] Speaker 03:
where, if you can call it a grant, but where it requires St.

[00:07:57] Speaker 03:
Bernard government to procure services to the tune of $3.2 million, I would say that that's a binding contract.

[00:08:05] Speaker 01:
You mean if St.

[00:08:07] Speaker 01:
Bernard were to do the work itself with its own employees, it would not be a binding contract, but as soon as it has to go out and get a subcontractor, it is?

[00:08:16] Speaker 03:
Well, if the government is, if we are procuring services,

[00:08:21] Speaker 03:
for the United States government?

[00:08:23] Speaker 01:
Well, the for the United States government, of course, is the question.

[00:08:28] Speaker 01:
If it's a grant, suppose the United States says, you know what?

[00:08:33] Speaker 01:
This county, this parish, needs help, had a disaster.

[00:08:38] Speaker 01:
Let's help them out.

[00:08:39] Speaker 01:
We'll give them a couple of million dollars to try to fix up the bio.

[00:08:43] Speaker 01:
That's not a contract, is it?

[00:08:45] Speaker 02:
Well, let me interject on that question, too.

[00:08:48] Speaker 02:
Because supposing the government says to you,

[00:08:51] Speaker 02:
we've given you a grant of three million dollars and you go out and spend the money either directly or by contracting and the government says we were just kidding.

[00:09:04] Speaker 02:
Do you have an implied in fact contract?

[00:09:08] Speaker 03:
I think so and the Texas case that I sought it in my opinion which was a like a FEMA reimbursement to Texas for emergency relief

[00:09:16] Speaker 03:
In that case, the court held that that is a binding contract and can be enforced.

[00:09:22] Speaker 03:
That would be a promissory estoppel, would it not?

[00:09:25] Speaker 01:
I don't know if it's promissory estoppel, but it is certainly... That sounds like a contract that's implied in law, not implied in fact.

[00:09:35] Speaker 01:
Perhaps.

[00:09:36] Speaker 01:
And if it is, then the Court of Federal Claims has no jurisdiction over it.

[00:09:40] Speaker 03:
That's right.

[00:09:41] Speaker 03:
The Court of Federal Claims only has jurisdiction over a contract... Implied in fact.

[00:09:44] Speaker 01:
Implied or express, and we contend this is an express contract.

[00:09:49] Speaker 01:
Right.

[00:09:49] Speaker 01:
So if it's an express contract, or if the idea is that the federal government gives the money to the parish, the parish then either does the work itself or gets somebody to do it.

[00:10:03] Speaker 01:
You say if they happen to get somebody to do it, then it's a contract binding on the United States?

[00:10:10] Speaker 03:
As long as we, as long as St.

[00:10:12] Speaker 03:
Bernard provides something of value to the government or just to the public in general.

[00:10:19] Speaker 03:
Well, think about it.

[00:10:21] Speaker 03:
What does the government do?

[00:10:22] Speaker 03:
It doesn't make money.

[00:10:23] Speaker 03:
It provides services to its citizens.

[00:10:26] Speaker 01:
But then you've, I think, read cooperative agreements out of the statute, because the cooperative agreements require, in order to be a cooperative agreement, that there be a public purpose for the expenditure of money.

[00:10:39] Speaker 01:
And your argument, as I am understanding it, would mean that that would convert a cooperative agreement, indeed every cooperative agreement, into a contract.

[00:10:48] Speaker 01:
Why not?

[00:10:49] Speaker 03:
Well, I'll give you, the Kimon case dealt with that.

[00:10:52] Speaker 01:
Well, let me, Kimon, keep in mind.

[00:10:54] Speaker 01:
Because that was a cooperative agreement.

[00:10:55] Speaker 01:
Keep in mind, in Kimon, there was a $15,000 payment to the government from the plaintiff in that case.

[00:11:02] Speaker 01:
And if there's any consideration at issue, that certainly satisfies it, it seems to me.

[00:11:10] Speaker 03:
Well, it was only a $15,000 payment.

[00:11:12] Speaker 03:
But what the court said was, it said that the benefit to the United States

[00:11:18] Speaker 03:
was the fact that there was a shortage of bovine serum.

[00:11:23] Speaker 03:
And this was for a private corporation.

[00:11:27] Speaker 03:
And the court said that there was valid consideration because it was a benefit to the United States to enhance importation of bovine serum.

[00:11:39] Speaker 03:
And it specifically recognized that the United States was not buying

[00:11:44] Speaker 03:
the C-room, and was not getting anything of money other than the $15,000 to reimburse some of the cost for putting in an inspector at the private plant.

[00:11:53] Speaker 01:
Which certainly constitutes consideration, right?

[00:11:56] Speaker 01:
I believe it does.

[00:11:57] Speaker 01:
I believe the benefit does.

[00:11:59] Speaker 01:
And in the end, Kimon was a non-precedential opinion, right?

[00:12:02] Speaker 01:
It is procurium.

[00:12:03] Speaker 01:
This is correct.

[00:12:04] Speaker 01:
Well, and beyond just being procurium, it was designated as non-precedential.

[00:12:08] Speaker 01:
So it's not binding.

[00:12:10] Speaker 03:
But its logic and its rationale is applicable here.

[00:12:15] Speaker 03:
The other thing I wanted to say is in the Tucker Act, in the Anchorage case, there's this provision that says in a contract, money damages are presumed and the government has to rebut it.

[00:12:28] Speaker 03:
And in this contract, there's a termination clause that says upon termination, the NRC's payments will be made in accordance with the NRC's liabilities.

[00:12:41] Speaker 03:
Liabilities is money damage.

[00:12:43] Speaker 03:
This is clearly a contract that embodies money damage with enforceable consideration.

[00:12:48] Speaker 03:
And so therefore, it should be upheld.

[00:12:53] Speaker 03:
I'll use the rest of my time.

[00:12:55] Speaker 04:
We will save it for you.

[00:12:58] Speaker 04:
Mr. Bizak.

[00:13:02] Speaker 00:
Good morning.

[00:13:03] Speaker 00:
May it please the court?

[00:13:04] Speaker 02:
Do you agree that offer, acceptance, and the authority of the signing government official are not at issue?

[00:13:11] Speaker 00:
They certainly have not been argued in this particular appeal and were not part of the lower court's opinion.

[00:13:18] Speaker 02:
That's a house cleaning question.

[00:13:20] Speaker 00:
Certainly, Your Honor.

[00:13:22] Speaker 02:
Would St.

[00:13:23] Speaker 02:
Bernard have paid out money to Omni absent your promise to reimburse it?

[00:13:30] Speaker 00:
That is unclear from this record, Your Honor.

[00:13:32] Speaker 00:
The assistance agreements under this particular program are certainly something that the local government

[00:13:40] Speaker 00:
applies to seeking assistance from the federal government for whatever particular improvements that they need to make.

[00:13:49] Speaker 02:
Is the government arguing that a cooperative agreement cannot be a valid contract?

[00:13:56] Speaker 00:
No, Your Honor.

[00:13:56] Speaker 00:
We recognize this Court's discussion in trauma services that any agreement could potentially be a contract within the jurisdiction of the Tucker Act

[00:14:10] Speaker 00:
if it meets the requirements of a contract.

[00:14:14] Speaker 02:
The statute underpinning the emergency watershed protection program makes flood destruction a matter of quote national welfare and improvements to watersheds a matter of general welfare.

[00:14:29] Speaker 02:
And it also says flood control is a quote proper activity of the federal government.

[00:14:34] Speaker 02:
Isn't fulfilling a statutory mandate a benefit for the government for the purposes of consideration?

[00:14:41] Speaker 00:
No, Your Honor, not for purposes of consideration.

[00:14:43] Speaker 00:
And frankly, if it were, that would render effectively every action of the federal government consideration worthy of the term consideration under a contract scheme.

[00:14:56] Speaker 00:
There is no way.

[00:14:59] Speaker 02:
The government did, in fact, pay some money

[00:15:03] Speaker 02:
to Saint Bernard for work done.

[00:15:05] Speaker 00:
Yes, Your Honor.

[00:15:06] Speaker 02:
So did the government pay out US government funds for which it received no benefit?

[00:15:14] Speaker 02:
Before you answer, keep in mind the Anti-Deficiency Act and other federal crimes.

[00:15:19] Speaker 00:
Yes, Your Honor.

[00:15:21] Speaker 00:
I don't think there is a question that we would dispute that the cooperative agreement in this case and the activities that were done pursuant to it

[00:15:33] Speaker 00:
by the parish were certainly authorized and... That's not my question.

[00:15:43] Speaker 02:
Were they a benefit?

[00:15:46] Speaker 00:
Frankly, Your Honor, I don't know that they were... Did the government pay out funds?

[00:15:50] Speaker 02:
My question was, did the government pay out funds for which it received no benefit?

[00:15:56] Speaker 00:
In the context of a consideration

[00:16:01] Speaker 00:
analysis, the government did not receive consideration for this particular action in the contract interpretation realm.

[00:16:12] Speaker 02:
So you're not going to answer my question?

[00:16:13] Speaker 00:
Well, Your Honor, I'm trying to answer your question.

[00:16:16] Speaker 04:
Is the answer that it was paid out under a cooperative agreement?

[00:16:22] Speaker 00:
I don't believe it's that circular, Your Honor.

[00:16:26] Speaker 01:
Well, a corporate agreement requires that there be a public purpose.

[00:16:30] Speaker 00:
Certainly, Your Honor.

[00:16:31] Speaker 01:
And there was.

[00:16:31] Speaker 01:
But it doesn't limit the public purpose.

[00:16:33] Speaker 01:
I take it to something that is of direct benefit to the government.

[00:16:38] Speaker 00:
No, Your Honor.

[00:16:38] Speaker 00:
And as you pointed out in the EWP statute and regulations, those regulations describe the public benefit of ensuring recovery from flood damage, ensuring

[00:16:56] Speaker 00:
the prevention of potential future, loss to life, loss to property of the citizens of the United States and their property.

[00:17:06] Speaker 00:
And that is certainly the effect of what was undertaken here.

[00:17:11] Speaker 04:
You're saying it benefits the people rather than directly the government.

[00:17:18] Speaker 00:
That's certainly one way to look at it, Your Honor, the people and the land contained within the United States.

[00:17:25] Speaker 02:
Why does the direct language apply to all government contracts?

[00:17:29] Speaker 02:
Because you make that argument, the 6303 argument.

[00:17:34] Speaker 00:
I'm sorry, could you repeat that question?

[00:17:36] Speaker 02:
Sure.

[00:17:37] Speaker 02:
You argue that a benefit to the government has to be direct to be proper consideration, right?

[00:17:43] Speaker 00:
Yes, Your Honor.

[00:17:44] Speaker 02:
By my reading, any direct language is only applied to the statute governing procurement contracts, specifically, not government.

[00:17:53] Speaker 02:
contracts generally.

[00:17:55] Speaker 02:
That's in 6303.

[00:17:56] Speaker 02:
Why does the direct language apply to all government contracts?

[00:18:01] Speaker 00:
I think I understand the question, Your Honor.

[00:18:04] Speaker 00:
I'm certainly not referring to a particular statute with that language, but trying to, as the court below here did, find a logical distinction between what constitutes consideration for contract purposes

[00:18:18] Speaker 00:
and what is simply this generalized public good that comes from the government undertaking its statutory intentions.

[00:18:29] Speaker 00:
And in this case, I think the language, and frankly, I think you find it both in current contracts as well as in third party beneficiary discussions, that the distinction between a direct benefit and an incidental benefit is

[00:18:45] Speaker 00:
is logical here in the context of determining when there is consideration for a particular contract.

[00:18:50] Speaker 02:
The government cites two of our opinions for the proposition that cooperative agreements, unlike procurement agreements, are not presumed to provide monetary relief.

[00:18:59] Speaker 02:
And that's Ricks, Mushroom, and Holmes v. United States.

[00:19:04] Speaker 00:
Yes, Your Honor.

[00:19:05] Speaker 02:
Where in the cases did we make such a holding?

[00:19:08] Speaker 00:
Your Honor, that derives from first the finding in Holmes that

[00:19:16] Speaker 00:
Just because any particular agreement could be a contract, there are certainly particular instruments that don't necessarily require this presumption of money damages or a monetary questionnaire.

[00:19:30] Speaker 00:
And in Rick's mushroom, Your Honor, this court was looking at cooperative agreements.

[00:19:35] Speaker 00:
There is clearly the instance, as in there, where a cooperative agreement could certainly be well outside the realm of money.

[00:19:46] Speaker 00:
And so in this case, where we have a finding by the court that this is, in fact, a cooperative agreement.

[00:19:50] Speaker 02:
Rocky Mountain Helium clearly cabins off Rick's mushroom.

[00:19:58] Speaker 00:
In which sense, Your Honor?

[00:19:59] Speaker 02:
It cites Rick's mushroom as a highly specific circumstance overcoming the presumption, quote, where a special government cost sharing agreement ellipsis was at issue.

[00:20:09] Speaker 00:
Yes, Your Honor.

[00:20:09] Speaker 00:
And I mean, frankly, again, we have

[00:20:11] Speaker 00:
a cost sharing agreement here.

[00:20:15] Speaker 00:
And again, this is not an analysis.

[00:20:17] Speaker 00:
The fact that this is a cooperative agreement doesn't end the question.

[00:20:22] Speaker 00:
We're certainly not arguing that because this is a cooperative agreement, it can't be a contract within the jurisdiction of the court.

[00:20:29] Speaker 01:
Well, to be more precise, you mean just because it's entitled a cooperative agreement.

[00:20:33] Speaker 01:
I mean, if it is a cooperative agreement, that means it has satisfied the statute.

[00:20:37] Speaker 01:
And the statute requires a variety of things,

[00:20:40] Speaker 01:
that it not be something that is for the direct benefit or use of the United States government.

[00:20:48] Speaker 01:
So if it turns out that it is for the direct benefit of the United States government, then it isn't a cooperative agreement, regardless of what it has on the title.

[00:20:56] Speaker 00:
Certainly, Your Honor.

[00:20:57] Speaker 00:
And I understand that the parish here is arguing that this falls outside of the statutory definition of a cooperative agreement

[00:21:08] Speaker 00:
We've argued we don't believe that's the case.

[00:21:10] Speaker 00:
This is a quintessential cooperative agreement, in essence.

[00:21:14] Speaker 00:
It clearly transfers a thing of value to a state or local government.

[00:21:20] Speaker 02:
The agreement specifically pertains to the government's promise to monetarily reimburse St.

[00:21:27] Speaker 02:
Bernard Parish.

[00:21:28] Speaker 02:
What other remedies for breach does the agreement provide other than money damages?

[00:21:34] Speaker 00:
Well, Your Honor, we would argue that it does not provide remedies for breach.

[00:21:38] Speaker 02:
Does the agreement specifically disavow money damage?

[00:21:44] Speaker 00:
Your Honor, we have noted the provision where the parish specifically agreed to hold and save the NRCS free from any and all claims.

[00:21:56] Speaker 02:
Including a lawsuit by itself.

[00:21:59] Speaker 02:
Do you think that's a reasonable implication?

[00:22:01] Speaker 00:
Your Honor, frankly, the plain language of that particular clause within this agreement

[00:22:08] Speaker 00:
appears to encompass a claim just like that.

[00:22:11] Speaker 02:
Has the government ever made that claim and had it sustained by a court?

[00:22:17] Speaker 00:
Frankly, I don't know the answer to that, Your Honor.

[00:22:19] Speaker 00:
I certainly haven't been able to find identical language to this that has been considered.

[00:22:26] Speaker 00:
But the trial court, in looking at this question of damages,

[00:22:34] Speaker 00:
taking this picture as a whole in considering that this is a cooperative agreement and that we therefore have to find within this agreement itself where the parish is entitled to money damages.

[00:22:48] Speaker 02:
One of the arguments you make is that the agreement makes reimbursement by the government contingent on appropriation.

[00:22:57] Speaker 02:
Did Congress fail to appropriate the funds?

[00:22:59] Speaker 00:
No, Your Honor, and I don't know that we made that particular argument.

[00:23:03] Speaker 00:
Our argument was more that the agreement makes reimbursement contingent upon... I'm struggling for the word, but the NRCS reviews the various submissions that come in through the parish.

[00:23:24] Speaker 02:
Let me read to you.

[00:23:25] Speaker 00:
Of course, Your Honor.

[00:23:26] Speaker 02:
Similarly, the agreement states both... This is from your briefing.

[00:23:29] Speaker 02:
states both parties understanding that the furnishing of financial and other assistance by NRCS is contingent on the availability of funds appropriated by Congress from which payment may be made and shall not obligate NRCS upon failure of the Congress to appropriate funds.

[00:23:53] Speaker 00:
Yes, Your Honor, and I apologize for forgetting that we did put that in there.

[00:23:56] Speaker 00:
Where I thought you were going, no, to answer your question again, there was no failure to appropriate, certainly that has been alleged here.

[00:24:06] Speaker 00:
The other element of the contingent nature of this agreement was that the NRCS has to approve the

[00:24:20] Speaker 00:
the reimbursement requests that come in from the parish.

[00:24:24] Speaker 00:
And not only is it unclear at best from this agreement under what circumstances that approval must be given, if it must be given at all, but that itself presents a contingency that suggests that this is not a two-way obligation.

[00:24:43] Speaker 01:
Where is the approval provision?

[00:24:47] Speaker 00:
Your Honor, that is at

[00:24:53] Speaker 00:
I believe it's Appendix 27.

[00:24:54] Speaker 00:
And I'm looking at paragraph 5.

[00:24:59] Speaker 00:
There are multiple numbers, but near the upper half of the page.

[00:25:06] Speaker 01:
Paragraph 5?

[00:25:07] Speaker 01:
I don't see anything about approval there.

[00:25:12] Speaker 00:
Your Honor, yes.

[00:25:15] Speaker 01:
The word approval is on the second line of paragraph 5.

[00:25:19] Speaker 01:
Oh, I see him.

[00:25:20] Speaker 01:
There is.

[00:25:20] Speaker 01:
You're right.

[00:25:21] Speaker 01:
Upon receipt and approval.

[00:25:23] Speaker 01:
Yeah, there we go.

[00:25:24] Speaker 01:
Right.

[00:25:24] Speaker 01:
OK.

[00:25:27] Speaker 00:
All right.

[00:25:33] Speaker 04:
Anything further?

[00:25:34] Speaker 00:
No, Your Honor, unless there are any further questions from the court.

[00:25:37] Speaker 04:
Thank you, Ms.

[00:25:38] Speaker 04:
Pizot.

[00:25:39] Speaker 00:
Thank you.

[00:25:40] Speaker 04:
Mr. McGooey has some rebuttal time.

[00:25:42] Speaker 04:
Almost three minutes.

[00:25:44] Speaker 03:
Yes, Your Honor.

[00:25:44] Speaker 03:
And I'd like to start off

[00:25:46] Speaker 03:
the brief rebuttal time with that particular point.

[00:25:50] Speaker 03:
The contract says that the NRCS will make payment upon receipt and approval, but it's not unfettered approval.

[00:25:57] Speaker 03:
It's no more different than an employment contract where someone has a contract to be paid plus expenses, reasonable expenses.

[00:26:06] Speaker 03:
Well, obviously, if the guy submits expenses that are exorbitant and crazy, within the terms of the contract,

[00:26:13] Speaker 03:
the employer could disavow them.

[00:26:16] Speaker 03:
But that doesn't make it totally within the discretion of the employer.

[00:26:20] Speaker 03:
St.

[00:26:20] Speaker 03:
Bernard had to submit reasonable expenses.

[00:26:24] Speaker 03:
And in the contract, at APPX 26, there's a provision that cites all the various regulations that provide for the reasonable costs.

[00:26:35] Speaker 02:
So this was not- Did the government refuse approval?

[00:26:38] Speaker 03:
Yes.

[00:26:39] Speaker 03:
They approved payment except for $400,000.

[00:26:43] Speaker 03:
And if this case gets remanded, there's a dispute about whether or not that $400,000 was adequate.

[00:26:47] Speaker 02:
Did they articulate a reason?

[00:26:51] Speaker 03:
Only that they wanted more information.

[00:26:53] Speaker 03:
And as a practical matter, St.

[00:26:55] Speaker 03:
Bernard sent additional information to justify within all of those regulations.

[00:27:00] Speaker 03:
And then they kept asking for more and more information.

[00:27:02] Speaker 03:
And at some point, St.

[00:27:03] Speaker 03:
Bernard said, we have to try and get this resolved.

[00:27:06] Speaker 03:
And so we filed our action.

[00:27:07] Speaker 03:
We believe that we did provide adequate support, but that would have to be dealt with below because it's a factual issue that hasn't been reached yet.

[00:27:15] Speaker 03:
But the point is, just because they have approval doesn't mean it's just willy-nilly.

[00:27:20] Speaker 03:
It is a binding contract for once St.

[00:27:23] Speaker 03:
Bernard supports the documentation as required by those regulations, then it's to be paid.

[00:27:29] Speaker 03:
The agreement says will be paid.

[00:27:32] Speaker 02:
Well, apparently what you're saying is the government never took the position

[00:27:37] Speaker 02:
that if they received sufficient information, that they weren't bound to pay you.

[00:27:42] Speaker 03:
That's correct.

[00:27:43] Speaker 03:
They have never taken that position.

[00:27:47] Speaker 03:
The other point I wanted to make is on the benefit issue.

[00:27:51] Speaker 01:
Well, they never took the position, I take it, that if they received adequate information, they would pay it.

[00:27:59] Speaker 01:
I doubt that they ever said anything about being bound to pay it.

[00:28:04] Speaker 03:
That's correct.

[00:28:05] Speaker 03:
They said basically, if you submit the documentation, we'll pay them.

[00:28:08] Speaker 01:
If we're happy, we pay.

[00:28:10] Speaker 01:
That's very different from saying, if we're happy, then we recognize that we're bound to pay.

[00:28:15] Speaker 03:
They didn't expressly say that.

[00:28:16] Speaker 03:
But all of the correspondence, if you read through it, when we get to that point in this litigation, it's clear that it was a definite obligation for them to pay if we sent in the form 277 with appropriate documentation.

[00:28:29] Speaker 03:
And Your Honor, in this case, I just

[00:28:33] Speaker 03:
However you view the laws on this, I think they align up with our position.

[00:28:37] Speaker 03:
But how can the federal government require a local entity to spend $3.2 million, sign a written contract reimbursement, and then just say the contract isn't worth the paper it's written on?

[00:28:46] Speaker 03:
That makes no logic sense in law.

[00:28:48] Speaker 01:
But if this were a grant, you would agree that there would be no binding obligation?

[00:28:52] Speaker 03:
The article, there is some argument that even a grant should be enforced.

[00:28:57] Speaker 03:
And that's the Law Review article.

[00:28:59] Speaker 03:
I have cited, but I haven't cited a case that says that.

[00:29:02] Speaker 03:
And that's a whole argument that goes beyond a situation where the United States government did get a benefit.

[00:29:08] Speaker 03:
Thank you, Your Honors.

[00:29:09] Speaker 03:
Appreciate your attention.

[00:29:10] Speaker 04:
Thank you, counsel.

[00:29:11] Speaker 04:
We'll take the case under advisement.