Precision Pine & Timber, Inc. v. United States

This is a government contract case. We must decide whether the federal government’s suspension of fourteen contracts breached any express or implied warranties. These fourteen contracts are between the U.S. Forest Service and Precision Pine & Timber, Inc. (“Precision Pine”), and provide for timber harvesting in Forest Service Region 3, which covers Arizona’s national forests. In August 1995, the Forest Service suspended the contracts pursuant to a court order. The order prohibited further timber harvesting in that region until the Forest Service consulted with the U.S Fish and Wildlife Service about the pertinent land resource management plans. See Silver v. Babbitt, 924 F. Supp. 976, 989 (D. Ariz. 1995). The order explained that such consultation was required under § 7 of the Endangered Species Act, 16 U.S.C. § 1536, due to the recent listing of the Mexican spotted owl as an endangered species. The fourteen contracts remained suspended until completion of the consultation process in December 1996.

Precision Pine subsequently brought this suit in the U.S. Court of Federal Claims, alleging that suspension of the contracts breached both express and implied warranties. The trial court agreed with Precision Pine. On liability, it granted summary judgment in favor of Precision Pine, concluding that the government breached both an express contractual warranty and the implied duty of good faith and fair dealing. Precision Pine & Timber, Inc. v. United States (“Precision Pine I” or “liability decision”), 50 Fed. Cl. 35, 65-72 (2001). Following this decision, the case was transferred to a different judge for the sole purpose of adjudicating damages. After five years of discovery, a twenty-four day bench trial, and extensive supplemental briefing, the trial court awarded $3,343,712 in damages to Precision Pine. Precision Pine & Timber, Inc. v. United States (“Precision Pine V” or “preliminary damages decision”), 81 Fed. Cl. 235, 294 (2007); see also Precision Pine & Timber, Inc. v. United States (“Precision Pine VI” or “final damages decision”), 81 Fed. Cl. 733, 739-40 (2008). The United States now appeals the liability determination and damages award. We reverse.